The Chinese real estate bubble is hurting citizens, economist says

The Chinese housing bubble may mean big bucks for investors, but it’s also having a seriously negative impact on citizens, according to a prominent Chinese economist.

Wu Xiaoqiu, an economist and vice president of Renmin University of China, told media at the Boao Forum in the province of Hainan last week that the current property bubble in China is disillusioning Chinese youth who can no longer afford to buy a home.

“In a regular country, wealth should be concentrated in the financial markets, not fixed assets,” he said, adding that, beyond the risk of a collapse, the bubble means youth are being left behind, according to CNBC.

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“If young people lose hope, the economy will suffer, as housing is a necessity,” Wu said, responding to a People’s Bank of China survey, which found that 52.2 percent of urban households perceived housing prices to be “unacceptably high.”

Wu added said he was hopeful the authorities would curb Chinese real estate speculation. [CNBC]Christopher Cameron