Evaluation & Prevention Of Finance Risk Of Real Estate In China

China's real estate industry has been in a period of rapid development since the end of the last century. During the whole "10-5th" period, the annual growth rate of investment in real estate was about 20%. The investment of real estate is close to 20% proportion in all investment of fixed assets.In a prosperous real estate market with increasingly higher prices, the voices whether the development of the real estate is healthy are incessant. Especially whether a vicious bubble and the financial risks exist in the real estate market is debated fiercely. There are different views in the civil, trade, even scholars fields. The real estate has enormous impact on finance because of its long industry chain, directly or indirectly affections on the entire national economic development, especially excessive dependence on the Chinese financial industry. Warnings from the 1997 Asian financial crisis warning to the recent crisis in the secondary mortgage of United States, we should pay attention to the increasing openness but far from mature economy.Well, do the vicious bubbles and financial risks exist in Chinese real estate? Chasing this matter in all controversies, this paper focus on 2 points: first, how to evaluate the vicious bubbles and financial risks in real estate market. Second, how to put preventive measures and establish an early warning mechanism.This paper trials from the relationship and definition of the bubble economy, the real estate bubble and financial risks. Studying the typical cases in Japan, Thailand and the United States, the paper analyzes the happened property bubbles and its background, process and the consequences, which triggered a financial risk. With some practical applications of common risk assessment indicators in real estate, evaluating its results and limitations, the view of the used indicators is proposed. With the development of the real estate market in China recently, the paper fatherly explores whether there is a vicious real estate bubble, whether that will result to real estate financial risks, and the causes of the real estate and financial risks. Accordingly the property to prevent financial risks and countermeasures are put on. In the end, the paper evaluates the performances of several existing early warning systems in the real estates, and put some design and preliminary ideas of early warning system for the real estate financial indicators.