Only this time, the effects could be felt on a global scale, as the low interest rates and easy financing will lead to higher interest rates down the road. Once this takes place, is the point that the real estate market and the country's financial system will become vulnerable to various shocks that can take occur in the economy. This is the biggest problem that the Chinese real estate market is facing as excessive amounts of speculation could make any kind of eventual downturn worse.
Bibliography
China. (2010, April 7). Retrieved April 21, 2010 from CIA website:
https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html
Demand and Supply. (2010). Retrieved April 21, 2010 from Investopedia website:
http://www.investopedia.com/university/economics/economics3.asp
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