From the Southern Weekend (in Chinese), translated by Adrian Lu via Press Interpreter:
The real estate bubble is not actually caused by housing prices themselves. Not only is it impossible for absolute real estate prices to illuminate the problem, even growth rates of prices or consumer attitudes can not be used as evidence to determine whether or not there is a bubble. Looking back, we can say that price levels of one to two years ago were not part of a bubble. Only the mad speculation that preceded the current slump can be described as a bubble.
1. The sudden rise in prices resulted from a standardless real estate system
Commercial developers in the early days of the PRC were very fortunate because they were able to use state-owned land practically for free. The deity that controlled all land was the people of China.
Now, bubble theorists constantly brood over the sudden profits realized by real estate developers. With profits so high above those of any other industry, is there any question that there is a real estate bubble? It is important to point out that sudden huge profits in the past do not represent sudden huge profits forever.
