Xiang Li: Exploring the consequences of the bursting of the real estate bubble.

The latest macroeconomic data further shows that the growth rate of China's real economy is slowing down. According to the original intention of macro-control, this should be expected. However, with the extension of regulation time, there are more and more concerns about the slowdown of China's real economy. The result we are worried about is the same, that is, China's economy may not survive the transition period smoothly, and active regulation may trigger a hard landing of China's economy, rather than the soft landing expected by policymakers. Among the existing hard landing scenarios, the most representative is that the real estate industry in China began to adjust and then collapsed, which eventually led to the collapse of the whole economy. Several common perspectives from the real estate industry are as follows: First, under the circumstances that China's economic transformation has not been successfully completed, the real estate investment caused by the recession of the real estate industry has fallen sharply, which will directly lead to the loss of growth momentum of dozens of related industries. Moreover, due to the tightening of monetary policy by the government and banks, the capital chain of real estate developers is tight, and real estate developers transfer upstream funds including building materials and construction industries to their own hands. Once the final capital chain is broken, this domino-like collapse is bound to sweep all industries above this chain. Secondly, the prosperity of the whole real estate industry is closely related to the land sales revenue of local finance. If the real estate industry collapses, it will undoubtedly drag local governments that rely heavily on land sales revenue into the abyss. When the local government loses the economic resources it controls, the original government-led economic activities will also stagnate, and related industries will immediately enter a depression. Finally, the bursting of the real estate price bubble will bring about the disappearance of residents' sense of wealth, which will seriously restrain China's domestic consumption and make it difficult for China's economy to transform. In short, based on the above considerations, once housing prices continue to fall on a large scale, everyone will become a loser. The author disagrees with this inference, but thinks that if the policy is handled properly, China economy may not be kidnapped by the real estate industry. Liu Zeng, the former chairman of the China Banking Regulatory Commission, said in the media that the banking industry in China can withstand a 40% drop in house prices without causing systemic financial risks. Although many real estate developers and scholars strongly doubt this data, considering the high down payment ratio in China, the author thinks that the risk of falling house prices to the banking system is indeed limited and controllable. However, the fear that the so-called decline in housing prices will lead to the disappearance of wealth effect may impact the consumer market in China, and it needs to be published in the nationwide housing credit information system in order to make a more accurate assessment. Financial planning has a * * * understanding, and the first house owned by a family is not included in its investable wealth. In other words, investment and consumption decisions that affect residents' future living standards are based on wealth conditions, regardless of the first home that residents already own. The establishment of the national housing information credit system will provide comprehensive and solid decision-making data support for our scientific analysis and the implementation of the government's follow-up regulatory policies. If the housing of most residents in China is not for speculation, but mainly for self-occupation, then the decline in housing prices will hit the market demand dominated by speculation. In this way, for the whole society, because the marginal consumption tendency of relatively low-income groups is much higher than that of high-income groups, we can expect that the decline in real estate prices will bring about an increase in the demand for improved housing. Judging from this, the decline in house prices will bring about the disappearance of the wealth effect and should not have a very significant impact on residents' consumption. On the other hand, if the real estate market in China has really become an investment-oriented market, then it is very necessary for the government to make use of the transfer payment function of fiscal revenue, introduce corresponding tax policies as soon as possible, and try its best to promote the housing market to develop in the direction of consumer goods. Just as Minister Jiang of the Ministry of Housing and Urban-Rural Development said a few days ago, building a nationwide networked information system is the premise and foundation of the next policy. I believe the government will make a correct decision based on comprehensive information. The further widening gap between the rich and the poor in China is not only a huge obstacle for China to build a harmonious society, but also a fuse to stimulate class contradictions and trigger unstable factors. Perseverance and continuous efforts to solve this problem are the key to avoid falling into the trap of middle-income countries and Latin America. As to whether China will repeat the fear that the Japanese real estate bubble burst and the economy fell into decades of stagnation, the author's point of view is that the window of economic adjustment in China has not been closed, and if the policy is properly applied, such a danger should be avoided. Facing the great uncertainty of external economic conditions, General Secretary Hu Jintao's speech at APEC once again emphasized that China's problems should be solved in the process of growth, which highlighted the importance attached by the central decision-making level to economic growth. For economic growth, the decision-makers have gradually formed a new understanding: this "growth" is not the "growth" generated by stimulating the economy with 4 trillion government investment when the US subprime mortgage crisis hit in 2008. The country's emerging industrial policy and a series of measures to adjust the mode of economic growth make the "old bottle" that relies on investment, injects intensive resources and pursues rapid GDP growth unable to bear the "new wine" that drives China's new economic growth model. In any case, this new economic "growth" is based on the birth of a number of brand-new industries, rather than the re-investment of the old paradigm with real estate as a strategic industry. Recommended reading: China's bubble prediction goes against common sense. Real estate is not a complete market economy. Commercial real estate has warmed up against the market and become a "safe haven". There is a bubble risk in the Ordos property market, or developers are on the verge of capital fracture. There is no overall bubble in domestic real estate, and everyone is not encouraged to own real estate.