The Probability Of Depression In China Caused By Collapse Of Asset Price Bubble

The intense fluctration in Chinese stock market and real estate market raises disscution about Chinese economy bubble and compare with Japan of 1980s and 1990s. The central point of this thesis is to research whether depression will happen in China after bubble collapses the same as Japan. Based on carefully analyzing relative economy phenomina of China and Japan, this thesis compares the two countries in two aspects. Firstly, 6 indexes are chosen to measure and compare the asset price bubble of China and Japan. The outcome is that the bubble degree of Chinese economy is lower than Japan. Secondly, this thesis deeply explores the mechanism of asset price bubble's collapse causing depression in Japan, then studies whether or not China applies to the Japanes mechanism given the feature of Chinese economy. The outcome is that long-term depression will not happen in China even if the asset price bubble collapses.The thesis uses different kinds of reseach methods such as qualitative analysis, quantitative analysis, modeling analysis and compare analysis. Some theoritical innovation and methodological innovation is generated in constructing the mechanism model of asset price bubble's collapse causing depression. Some practicle innovation is generated in quantizing Chinese asset price bubble and analyzing the applicability of Chinese economy to Japanese mechanism.