China’s Real Estate Finance and Its Risks

Abstract

Real estate is a pillar industry of China’s national economy, and its stable and healthy development is a major issue for the national livelihood. As the blood of economic development, finance promotes and facilitates the booming real estate industry. With the deepening support of finance for real estate, financial risks are emerging in the industry. The global financial crisis triggered by the U.S. subprime crisis is a typical example. As market objects, financial products are both the targets of transactions and investments and carriers of risk. In large part, real estate financial product risks are the core of real estate financial risk. Therefore, we should attach great importance to the prevention of real estate financial products risk, draw profound lessons from the international experience, and establish a real estate financial products risk prevention system appropriate for China’s national conditions in the hope that by reducing real estate financial risk, China can achieve greater financial support of real estate and promote the prosperity of the real estate industry. As typical representatives of the transformation of real estate financial products from traditional to innovative, the main risks faced by real estate credit, real estate securitization, and real estate investment bank-trust funds are the focus and breakthrough point of this study.