Real Estate Bubble in China

Question: Is China experiencing a Real Estate Bubble? and what are the long term implications for China?

Answer: In all likely hood China is experiencing a real estate bubble, that will burst at some point in the future. However, throughout history all powerful emerging economies have had set backs and bubbles. So, while it is necessary to be cautious when things move too fast in one direction, it is wise to keep this all in perspective.

Take for example the US in the 19th century; the US had both the Civil war, and the railroad bubble.

I can only imagine that investors in Europe must have looked around the US and said "their just laying too much railroad track-no way their economy can support that, eventually when the money dries up the whole things gonna tank." Well the RR bubble did burst, but that obviously was not the end of the story for US which still went on to be a HUGE growth market.

Point is investors need to see the forest through the trees.