For four days, the Chinese Communist Party elite has been meeting behind closed doors in Beijing to thrash out what new policies should govern the fastest-growing economy in the world, and how to prevent the global financial crisis from damaging China’s continued prosperity as much as that of the West.
The meeting is taking place just as ominous signs are emerging that the financial meltdown in the US is having an impact on China.
The property boom of the last few years has come to an abrupt halt.
High prices and a surplus of new homes meant that in September, traditionally the best month for house sales, there were the lowest number of transactions so far this year.
Developers in the worst-hit cities, Beijing, Shanghai and Shenzhen, have been slashing prices by up to 30% in an effort to attract buyers.
‘I think house prices will fall by another 10 to 15% by the end of the year,’ said Yang Shaofeng, the general manager of the Beijing Lianda Sifang Real Estate Co and the author of one of China’s most widely-read property blogs.
‘Since 2006 a lot of money has gone into the housing market and the stock market, and that’s created a bubble. Now, the bubble is bursting.’