| The research of modern economics usually defines the bubble as the continuous deviation of the capital price from its basic value. Bubble economy begins with the prosperity and end with the crisis. The result of it leads to the distortion of the capital price, to the display of resources allocation and thus does harms to the healthy development of the financial system and the whole economy. According to the experiences of the bubble economy and financial crisis all over the world, we realize that real estate is one of the main carriers of bubble economy. That it has become the carrier of the bubble is determined by its physical feature, economical feature and the market atmosphere. Ways of delimitating the yardstick of the bubble of real estate: the first is the house price, and the international usage is between three times and six times. But it has surpassed twelve times in Beijing and Shanghai. The second is the relationship between the real estate investment and the increment speed of the price of the houses. Although the increase scope is lower after the macroeconomic control, the price of the houses is still up more than 28% between Jan. and Sep. in 2004 especially in the medium and big cities. The third is the empty rate of the marketing housing. According to a recent statistics of the Statistical Bureau of the State, the total empty area of the market housing is 123,000,000skm all over the country by the end of 2004, among which, the number of the houses that is empty more than one year takes up 50.8%. The forth is the proportion of the real estate in all the investment. The real complete amount of the real estate development and investment of our country increases by more than 20% every year in the past few years. As the consumption goods, the price of the houses at home is far higher than the bearable standard of the medium income consumers. Comparing with the reserve price of the consumers, the price of the houses is overestimated by 20-30%. However, the real price is higher than it by 20-30%. As the investment commodity, there is little relationship between the increase of the price of the houses and the changing of the basic aspect factors. From the data analysis and the measuring result of the bubble existing in the real estate field, the theory of "without the bubble"firmly proposed by the prolocutors of real estate lies obnoxious. Therefore, we can conclude that: whether it is regarded as the consumption goods or the investment commodities, the price of the real estate in China at the present can't reflect its basic value, and thus we say that the apparent complete price bubble of the real estate in China at the present. Reasons of forming the present price bubble of the real estate in China: I. The limit of national conditions of more people and less land and the monopolization of the government in supplying the land 1. National conditions of more people and less land There are 1,300,000,000 people in China, whereas the acreage under cultivation of per capita of China is just a little more than 1/3 of that of the world. Controlling strictly the area of city planning and the acreage under cultivation will lead to the limit to the development of real estate, limit to the area used for the city building and the limit to the increase of the provision. On the other hand, the population is increasing and therefore, the population in the cities must increase and the demand for the real estate must increase too. In addition, the urbanization issue also pulls the investment. At the present, in China, about 80% long-time investment relates to the urban housing and public infrastructure building. It also pulls the development for the second time of the heavy industry and the upgrading of the consuming, which also needs the real estate as the support. 2. The monopolization of the government in supplying the land The local government can run up the remising price of the land and run up the price of the houses. The rising price makes the real estate market produce the room for substantive profit, which appeals the developers to invest moreand encourage the wish and confidence to invest. The high monopolizing price of the houses makes the cost of the houses climb, and the local government proves rationality of his action through the reason that the developers are willing to buy the land with high price. By nature, the high income by transferring the land is a kind recessive income because the purchasers pay the tax indirectly by paying the high price of the houses. However, the inflation rate has some relations with the development of the real estate, and therefore, the income of local government in transferring the land in fact comes from the dwellers, whether they buy the houses or not. II. The heavy tax on the real estate field collected by the government The active tax system is against the optimization of resources allocation of the real estate in the frame of the kind of the tax, the setting of the tax rate, tax gist and the tax system, and influences the healthy development of the real estate. 1. The repetitious setting among the kinds of tax, i.e. colleting the tax repetitiously brings the extra burden to the practice of economy. 2. The active tax system has more kinds of tax and heavy burden in the circulation intermediaries whereas it has less kinds of tax and light burden in the holding circulation. 3. The setting of the tax rate can't be fit for the demand of the economic development of the real estate. 4. The gist for collecting some tax is not rational and can't reflect the real value of the real estate market. 5. The system of rent, tax and fee is in disorder. It is very serious to push aside the tax with the fee that restricts the exertion of the function of the tax macroeconomic control. III. The substantive capital support of the Industrial and Commercial Banks to the real estate field By April 2004, the real estate development has invested 880,000,000,000,among which the loan takes up 720,000,000,000. In addition, among 17,000,000,000,000 in all the financial organizations in China, more than 50% loan is mortgaged with the real estate certificate. Buying the house with the loan in the market economy is an act of consuming with the future income. But the issue existing in it is that it is very possible for the people who loan the money to buy the house haven't enough money to pay back the loan in the future. Once the situation that people can't pay back the loan is widespread, the banks will auction their houses and this will arouse the fall of the price of the houses and the rise of the ill capital in the bank, which may become the reason of the financial crisis and the economic sag. In addition, in the past two years, 3/4 marketing houses sold to the people who haven't the ability to pay back the loan or they don't have the willing to buy it. These buyers will sell their houses again in the future, and thus greatly increases the pressure that the supply exceeds the demand. At that moment, the houses building will shrink and it will makes the price of the raw material drop and the raw material industry or even the whole economy will get into the sag. The economy at fever pitch is very frail and possibly after the fever, economy will fall back to the sag that the demand is lacking. IV. The developers of the real estate taking advantage of the governmental right to rob the social wealth. When pulling down the houses in the cities in the past few years, the developers of the real estate taking advantage of the governmental right or even the state right to force the citizens submit. And just in this forceful process, the treasure of most of the citizens are deprived. The same, the government often confiscates the land of the farmers with the reason that the land is owned by the state, and basically, they confiscate the land freely or with a little money and then they transfer the land to the developers with a certain price and the developers will build the marketing houses and sell them to the consumers. Today, the main motivation of the Chinese developers does not lie in...
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