China's Real Estate Dilemma

Efforts by China's central government to rein in the country's real estate bubble have made some limited progress but have also caused a number of adverse consequences. The land sales that provide local government revenue, associated industries like construction, and personal investments by relatively wealthier purchasers could have been negatively affected. Beijing is trying to stabilize housing prices while also avoiding a slowdown in growth, but any real push to contain the housing bubble will require it to take on some of China's most difficult, long-standing issues, such as the urban-rural divide, banking sector restructuring and the tension between the central and local governments. Beijing will almost certainly face a backlash from whichever interests are not protected.