China Tells

Is China’s housing market in a bubble? Will China’s real estate price go up or down? What are the factors behind to support an ever increasing housing price in China? These are all big tough questions. Recently a graph from Credit Suiss caught Chinatells’ attention. According to the graph, there is a positive correlation between the number of new graduating college students and China’s property price since 1999. In the foreseeable future there are likely more students to graduate from college. Therefore such a trend would be a supporting factor to the housing price. It seems that the two did go up hand in hand in the past ten years. However I am not sure such a positive correlation provides good evidence to support a causality between the two. A good potential reason for an increasing trend of college graduates is that the Ministry of Education has allowed the universities to increase the enrollment of students in the past ten years. Such an increase trend is consistent with a downtrend in the young labor supply in the past decade. Therefore I doubt whether the positive correlation will continue in the next few years.

关于中国房价的争论经常上报纸头条。最近我看到一份瑞士信贷的分析，指出在过去10年中，中国的大学毕业生和房价同步上升，成很强的正相关关系。该报告预计在未来几年中国的毕业大学生将继续增加，因此会对房价有一定的支撑作用。我不否认过去10年可能两项数据确实同步上升。但是这其中有很多原因，包括大学的扩招。因此该关系能否在未来继续保持正相关很值得怀疑。