The Chinese property market experienced what might be said to be the start of a property bubble but the Chinese government looks to be averting it by means of continued investment.
The Chinese property market is presently a key part of our investment strategy and we are cautiously investing in the region for although we remain skeptical about the long term prospects the short term ones, which comprise a considerable portion of our business, have a far sunnier outlook.
Looking to the long term the Chinese government have tried many tactics to control the price hikes with higher deposits, land development taxes and sale restrictions. The danger is of course if the fall is so deep in properties that the default raises, should that happen then governments could be in trouble as they have borrowed so much money from the banks this could lead to bank defaults and from there it spirals out of control. This is of course a worse case scenario which will probably never come to fruition.