Vanke is China’s biggest property developer and if it is worried about a real estate bubble in some of China’s largest cities then the government sits up and takes notice.
Wang Shi, the head of Vanke, China’s biggest property developer warned that real-estate bubbles in some of China’s biggest cities could spread elsewhere in the country, with potentially damaging consequences for the market.
Wang Shi, in an interview, said government stimulus measures of a year ago to keep China’s economy from being sucked into the global recession have helped to cause a fundamental turnaround in a property market that was severely ailing before the global financial crisis hit.
Wang Shi says that while the resulting price rises this year haven’t been excessive so far in most Chinese cities, the increases in places like Beijing, Shanghai and Shenzhen have been surprisingly sharp.
He allows that nationwide, "things haven’t risen to a property bubble yet" but he warned "in individual cities, and in some of the main cities, there is clearly a bubble. There’s no doubt about that…I’m very concerned."
Mr. Wang’s remarks are some of the strongest cautionary statements in a growing debate about renewed dangers of speculation in the property market, which has been one of the most robust components of China’s economy this year.
Wall Street Journal said Mr. Wang offered no specific policy prescriptions for addressing the potential bubbles and said he is, overall, "cautiously optimistic" about China’s economic outlook.