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Enlightenments Drawn from the Bursting of Japan’s Real Estate Bubbles in 1990s(No.187, 2016)


By Wang Wei & Shao Ting, Institute of Market Economy, DRC

Research Report No.187, 2016 (Total 5070) 2016-12-22

Abstract: In view of different development periods, the formation, accumulation and bursting of real estate price bubbles in the world are quite different in terms of forms, reasons and countermeasures. But generally speaking, there has not been a successful case to deal with the bursting of bubbles so far. The bursting of bubbles at each time is susceptible to subjective and objective factors both at home and abroad, including the domestic and international development environment, macro-policy system and the government real estate regulatory policy. As a result, the bursting of bubbles should be analyzed case by case. The present performance of China’s real estate market is similar to that of Japan in the mid-to-late-1980s. By analyzing the formation, accumulation and bursting of Japan’s real estate bubbles from the late-1980s to the beginning of 1990s and viewing from the macro-landscape and present operation of China’s real estate market, this paper puts forward some policy options to take lessons and draw some experience from Japan, prevent and cope with real estate bubble risks and maintain a stable and smooth performance for China’s real estate market.

Key words: real estate, bubbles, Japan