Beijing – The global financial crisis has brought down the stock market and caused a spike in house prices in China.
A surge in Chinese stocks has helped to fuel the property bubble and has helped propel the country to the top of the list of fastest-growing global economies in the past year, according to research firm CB Insights.
CB Insights says the global housing market crash of March 2016 is responsible for the massive rise in the value of the Shanghai Composite Index (SCI).
China has also had a huge impact on the Chinese economy, with the country’s economy growing at a compound annual growth rate of 8.3 per cent during the period from March 2017 to March 2018.
China’s economy has grown at 8.8 per cent since March 2017, according CB Insight.
The Shanghai Composite is the benchmark of the country, the world’s second-largest economy and the second-most valuable stock market in the world.
It is a proxy for the strength of China’s economic, financial and real estate sectors, according the CB Insives report.
According to CB Insakes research, Shanghai is the biggest city in China and the countrys most populous city.
“As the world was still recovering from the financial crisis, China’s stock market boom has been fuelled by unprecedented Chinese buying,” said Marcus Chabris, CEO and co-founder of CB InsIGHTS.
“[The market crash] has been one of the most important factors in accelerating China’s economy, and it is helping to propel its share price and GDP growth to record levels.”
China stock market crashes – February 10, 2017 The housing bubble is believed to have been fuelled in part by a housing boom in China after the country joined the Shanghai Stock Exchange (Shanghai Composite).
The market had previously soared to record highs before it was halted due to the financial crises.
On February 10 2017, the market jumped to a record of 1,746.1 points.
But the market’s collapse came just two days after a US presidential candidate accused China of manipulating its stock market for political gain.
At the time, the US Treasury Department said the US Securities and Exchange Commission (SEC) would be investigating the Shanghai market crash.
In March, the government of President Xi Jinping announced a $100bn bailout of the Chinese stock market.
Chinese shares have soared over the past two years and now top $1,000.
Although China is not one of Chinas top three economic powers, it has been seen as a key market for the country due to its close ties to the United States.
Chabris said the housing bubble and the economic crash in China have contributed to the increase in China’s real estate values.
He said the government was trying to create a better climate for home ownership in China by raising taxes on luxury properties.
Other recent economic changes have also had an impact on China’s property market, with a recent increase in home ownership and a strong domestic manufacturing sector.
Since the housing market meltdown, China has increased its stock ownership rate from 7.9 per cent to 7.6 per cent.
However, China is still not as expensive as it was before the financial crash.
In March 2017 China’s benchmark Shanghai Composite index fell by nearly 50 per cent, its biggest drop since June 2017.
Market cap -$1.6tn China currently holds the fourth largest capital stock market after the United Kingdom, the United Arab Emirates and Japan.
Its real estate market is the second biggest after the US and its financial markets the second.
While it is one of Asia’s fastest-expanding economies, China still has a lot of challenges in building and maintaining a stable, productive economy.
Banking sector -US$9tn China’s banking sector is the third-largest in the global economy, behind the US, Japan and China.
The bank sector is seen as one of its most vulnerable sectors.
Despite its size, the banking sector still remains relatively small in terms of market capitalisation, accounting for less than 1 per cent of China GDP.
Bank sector -$15tn According the CBInsights report, China currently holds more than $15 trillion in US dollar assets.
This is the largest banking sector in the developed world.
“China has been an attractive investment destination for investors in the wake of the financial market crisis, and its stock markets have been among the most volatile in the region,” said Chabrous.
When the housing collapse hit, many investors rushed to buy property in China as they did not have the capital to do so.
As a result, China was the biggest beneficiary of the market crash, as the real estate bubble in China was largely due to a strong housing market in Beijing.
Foreign direct investment (FDI) -$8.6bn China currently has