China Ceramics Co. Ltd. (CCLTF)

[redman_2014]

I think this quote sums up perfectly what investors might be thinking, and what the Chinese government wants to avoid: "Fool me once shame on you, fool me twice shame on me"

The U.S. housing crisis is still very fresh in everyone's minds and any hint of a bubble sends everyone scurrying to safety because they would rather miss a great opportunity than risk the chance of looking like a fool.

But the Chinese government also doesn't not want to have egg on their face by not learning from the mistakes of the West. I'm sure if a bubble exists they will find a way to let the air out slowly. The way prices are appreciating it's possible a price bubble may exist in the Tier One cities but I doubt it extends much farther afield than that. And I don't think there is a supply glut at all such as the U.S. has. Here is an article from today about the government's intentions:


Reining in housing speculation in high-price cities
By Zhao Tingting (chinadaily.com.cn)
Updated: 2010-04-14 11:48

China will restrict housing speculation moves in cities with skyrocketing housing prices and insufficient supply, the National Business Daily reported Wednesday, citing an unidentified official with the Ministry of Housing and Urban-Rural Development (MOHURD).

Multiple and bulk home purchases will be restricted, the official said. The ministry also stressed that it would curb the alarming rise of housing prices in some cities.

More strict and differentiated credit and tax policies will be implemented to multiple home purchasers to rein in housing speculation, according to the official.

The ministry urged governments at all levels to support low-income housing construction.

The national goal for 2010 is to build 3 million apartments for low-income families, renovate 2.8 million in urban shantytown areas, and expand renovation of dilapidated houses in rural areas, said the official.

http://www.chinadaily.com.cn/business/2010-04/14/content_9728689.htm


-Adam