With no meaningful reform, China's property prices set to soar

(June 8): China’s home prices could rise by another 50% in the nation’s biggest cities, as the latest measures to rein them in are likely to be eased by policy makers seeking to support the broader economy.

So says Zhu Ning, deputy director of the National Institute of Financial Research at Tsinghua University in Beijing and author of "China’s Guaranteed Bubble: How Implicit Government Support Has Propelled China’s Economy While Creating Systemic Risk." As measures to curb housing prices drag on growth in the second half and early next year, he says, the government will resort to its old playbook of dialing them back again to shore up expansion.

"We’re living through a bubble," Zhu said. "If we don’t engage in more meaningful reform, which we haven’t, we’re very likely to have a financial crisis or a burst of the bubble. It’s a matter of sooner or later."

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