This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

China ETFs Navigate Tricky Housing Bubble

NEW YORK ( TheStreet) -- When it comes to global investing, one of the biggest and most closely watched stories over the past few years has been China's handling of its red hot housing industry.

This week, it appears as though a new chapter has begun to take shape. While interesting to watch, this is a story that conservative ETF investors would likely be best off following from the sidelines.

Fearing a bubble, government officials have taken a myriad of steps to reign in the breakneck growth of the real estate market. In the past, these proposed policies, which have included higher down payments, bans on third-home purchases, and placing limits on bank lending, had little impact on cooling expansion.

However, the story began to show signs of shifting in late 2011. At the start of the new year, The Wall Street Journal reported that 70 Chinese cities saw property prices head lower in December from the previous month, marking the third consecutive month of declines. This trend continued into January.

Tumbling home prices help to ease some bubble-related pressure. However, this downturn has also brought with it some new challenges, the most pressing of which is the fear that slumping home prices combined with macroeconomic tensions in regions like Europe would result in a devastating Chinese economic "hard landing."

Now, as European fears are taking a back seat, China's policy makers are beginning to ease their grip on the housing market.

Bloomberg reported in mid-week that China's central bank was once again taking active steps to influence the nation's housing market. This time, however, the moves made appear to be an effort to reignite demand and buoy the industry. First-time home buyers will be the main focus for these policies. The report notes that, in addition to getting loan priority, the government will take steps to promote increased construction of affordable housing.

The central bank's turnaround to promote and provide added support to the Chinese housing market is encouraging and as a result shares of Chinese-focused ETFs have enjoyed a welcomed spurt of strength.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FXI $34.07 0.00%
HAO $22.96 0.55%
TAO $19.67 0.00%
AAPL $95.03 0.21%
FB $116.73 0.00%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs