Why Does China Inhibit Stock Prices, But Not Home Prices?

Vice President of Renmin University Wu Xiaoqiu says China’s regulatory regime allows home prices to rise, but not stock prices.

Wu Xiaoqiu: Many people think that these two types of assets is a seesaw, why? I do not know how long this regulation can last, a lot of regulation is over half a year, the next round facing a more explosive rise. We have done very well in many areas, can find some way, but in such as stable housing prices, so that it can and economic, income growth match the rational rise, so far have not found a way. Facts have proved that the purchase is not an effective way, this is not a time to take such measures, but many times, and should think about other ways.

As for the stock market can not rise also depends on policy guidance, and now the Chinese market, the stock market-related policies are still more stringent, we still do not welcome the stock market prices. In the stock market prices and real estate prices rose between, seems to be more tolerant of real estate prices, not tolerate the rise in stock prices. In fact, the rational study of the conclusion is just the opposite, the stock market price rise higher than the real estate prices on the future economic damage is relatively small.

The answer is China’s wealth is wrapped up in housing. It isn’t that China wants to let home prices rise, but not stocks. It would prefer neither rise and capital flow into other areas of the economy. But if there’s going to be a bubble, might as well be in GDP-driving real estate.

iFeng: 吴晓求:政策能容忍房价上涨 不太能容忍股价上涨

Author: 罗臻 http://www.investinginchinesestocks.blogspot.com

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