The Federal Reserve Were To Retreat Quantitative Easing

Summary: Right at the day that the Fed quit QE, China Academy of Social Sciences also revealed the Real Estate Green Paper, although you can not invest in China Real Estate market with USD directly, but hot money can not be completely kept out. According to Qianzhan published China Real Estate Industry Report, Even Zhou Xiaochuan, the chief of China Bank admitted that data shows the market price of China Real Estate of first tier cities have risen seven times after 2006 hot money investment.

Right at the day that the Fed quit QE, China Academy of Social Sciences also revealed the Real Estate Green Paper, although you can not invest in China Real Estate market with USD directly, but hot money can not be completely kept out. According to Qianzhan published China Real Estate Industry Report, Even Zhou Xiaochuan, the chief of China Bank admitted that data shows the market price of China Real Estate of first tier cities have risen seven times after 2006 hot money investment.

According to the Green Paper however, the first tier city Real Estate will reach its climax as soon as spring 2014, after that, Real Estate in 2nd or 3rd tier cities will begin to fall apart. This has already happened in some of the cities in China like Wenzhou.

On the other hand, the total sum of hot money that got into China is not a small number. The foreign exchange in China in the third quarter this year was 27.51 trillion yuan, the base currency was 26.3 trillion yuan, the coverage of foreign exchange to base currency was over 100%.

As large sums of money fled out, consumer's expecations will suffer a heavy blow. In China, house purchase is more like an investment, people do not wish to invest when the prices were going down, but rush in when the prices are driving up.

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