Loose lending drives Chinese property surge

China’s economy has surged in the second quarter to grow 7.9 per cent year on year.

The economic turnaround has been fuelled by increased bank lending and government spending.

Bank lending in the first half of the year was 7.3 trillion yuan ($1.4 trillion), which has led to increased liquidity in the real estate markets.

The Shanghai Index has jumped 75 per cent since the beginning of the year; property sales increased by 50 per cent in June and house prices also continue to climb.

While analysts have raised fears about potential bubbles forming in the property market, Premier Wen Jaibao said Beijing would continue to encourage government spending and bank lending.

China’s economy has surged in the second quarter to grow 7.9 per cent year on year.

The economic turnaround has been fuelled by increased bank lending and government spending.

Bank lending in the first half of the year was 7.3 trillion yuan ($1.4 trillion), which has led to increased liquidity in the real estate markets.

The Shanghai Index has jumped 75 per cent since the beginning of the year; property sales increased by 50 per cent in June and house prices also continue to climb.

While analysts have raised fears about potential bubbles forming in the property market, Premier Wen Jaibao said Beijing would continue to encourage government spending and bank lending.

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