'China syndrome' means country faces dangerous property bubble

http://www.telegraph.co.uk/finance/china-business/8290457/China-syndrome-means-country-faces-dangerous-property-bubble.html

One of China's leading economists has said that the country is facing the possibility of a dangerous real-estate bubble and rising inflation which could put growth at risk.

Yu Yongding, senior fellow at the Chinese Academy of Social Sciences (CASS) and former member of the monetary policy committee of the People's Bank of China, said that the demand for new property was so high that prices were in danger of soaring out of control.

Speaking at the World Economic Forum in Davos, Mr Yongding said that China's authorities would have to act to calm the market and that the rate of growth would have to be lowered: "Definitely inflation is the biggest concern so far. At the same time we are concerned about a real estate bubble.

"The demand for houses is still tremendous. So there is a tug of war between the central bank and the real estate developers. If the bank loosens policy there may be a re-emergence of a real estate bubble."

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