2005.11.10
Seminar Title: The Property Market and the Macroeconomy of the Mainland: A Cross Region Study
Time: 2:00pm-3:00pm, Thursday, November 10, 2005
Language: English
Speaker: Dr. Matthew S. Yiu, Hong Kong Monetary Authority

Abstract: This paper studies the nexus between the property market and the macroeconomy of Mainland China in 1998-2004, using panel data models covering 31 provinces and major cities. The estimates suggest three main conclusions. First, there seemed to be a two-way linkage between property price and GDP growth. In particular, property price increase had a significant positive impact on investment, but no evidence of a wealth effect on consumption is obtained. Second, credit expansion by the four large state-owned banks did not seem to play an 'accelerating' role in property price inflation, but data limitation prevents an analysis of total bank credit by provinces. Third, land price rise had a much larger 'multiplier' effect on property prices in coastal areas than in the interior provinces.