[ZephyrLeanne]

Remember Japan's bubble of the 80's? Now some people are writing that China is also in that same position, and would burst soon due to some factors.

TIME: Is a China Stock Bubble Forming?

All bubbles eventually have the air let out of them, sometimes with disastrous results. The danger today is that overheated enthusiasm for Chinese offerings may end very badly, particularly if the vaunted green shoots of global economic recovery were to turn out to be no more than yellow weeds.

Globe and Mail: Emerging markets performing maybe a bit too well

These economies could be stuck in low-growth modes for the foreseeable future

Telegraph UK: Chinese stimulus cash is inflating new stock market bubble, officials warn

Half of the 5.8 trillion yuan (£522bn) of stimulus loans issued by Chinese banks have flowed into the country's stock and property markets, inflating new bubbles, according to senior Communist officials.

America Blog: Property bubble building in China

So far during this global recession, Beijing has moved quickly to pump billions into the economy to keep it flowing. Their rescue plan was focused on modifying the export based economy into an inward looking economy while the global recession passes. To a large degree it's worked. Exports are down, obviously, but the government has managed to keep growth at a relatively high level though maybe not as high as required to keep up with the always heavy influx of new workers. Their own stimulus may be running out of gas and it's highly probably they will need to act again because it's wishful thinking to believe Western consumers will come back in the near term. China has the money to invest internally but still, it's a stress and a radical change from the export bubble economy.

With that background, now China may be looking at yet another bubble. A real estate bubble which of course, means problems for banks as well. Facing one bubble is challenging enough but another?

The Atlantic: The Chinese Are Just Like Us

China risks frittering away its stimulus spending on speculation in stocks and real estate, reports said Monday, citing economists who say surging bank loans risk inflating risky asset bubbles.

The government’s efforts to encourage more bank lending also have helped drive share prices as some of that money has been funneled into the equity market. That is reviving fears of another bubble.

The Shanghai market has been marching to its own drumbeat since the beginning of 2006. The index rocketed in ’06 and 2007, reaching a record 6,092 in October 2007. Then the market crashed, losing 65% last year. Most of that occurred before the global market meltdown last fall.

Still...
FT: China's exuberance undiminished by talk of asset bubble

So,what do you think?