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Submitted by Mu Chunshan via The Diplomat,

Rising home prices, especially in major cities, are prompting a growing chorus of discontent among ordinary Chinese. My Japanese friends would no doubt feel more than hint of nostalgia should they visit Beijing. For just like the famous Japanese “bubble economy” of the late 1980s, Beijing has been virtually turned into one big construction site with constantly changing streetscapes.

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Certainly, China’s housing market has been amazingly bullish for many years. Official figures for Beijing homes put the average price at $3,800 per square meter, up from around $500 per square meter in 1989 (incidentally, the peak of the Japanese real estate froth).

But don’t try telling Chinese real estate developers it’s a bubble. In their eyes, the local real estate market is no such thing. Prices will only continue to rise, they argue.

Ren Zhiqiang and Pan Shiyi are general managers of two well-known real estate companies. They successfully "predicted" the housing bull market, making them opinion leaders on Sina Weibo (China's Twitter), where they each boast about 15 million fans. While young people in other countries might admire Bill Gates, Mark Zuckerberg, or other famous entrepreneurs, Chinese netizens are starry eyed about two real estate developers. It is as good an indication as any of the tremendous influence that real estate has on Chinese society.

For their part, Ren and Pan have been harshly critical each time the Chinese government unveils measures in yet another bid to control the runaway market. And indeed, the government has not been hesitant about expressing its concerns, former Premier Wen Jiabao noting publicly that real estate prices were unreasonable, and tighter regulations were needed.

In 2006, a friend of mine bought a house in central Beijing. He paid about 10,000 yuan per square meter. Six years later, the price had risen to 60,000 yuan per square meter. That, of course, far outstrips any increase in the average wage over the same period. No wonder, then, that Chinese like to joke, “When it comes to house prices, the premier has no say, as it depends on the general managers."

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