中国市场面临的窘境

It's one of the worst performing markets in the world. The Shanghai Index continues to tumble, its investors panicky amidst economic uncertainty in Europe and the Chinese government's attempt to pour cold water on a red hot real estate market.

"The way I see it is that they have two tools. They've got the accelerator and they've got the brakes. And so they go back and forth between stomping on one and stomping on the other."

Officials are stomping on the brakes with new property regulations, raising mortgage rates and down payments for second home buyers, tightening lending for third-home and non-local buyers. Beijing realtors say sales have slowed slightly in the last month. According to government figures, prices are up at an average of 12.8% across the country. But in some cases it's more than 30%.

"So this is a luxury home?" "Yeah", "four bedrooms?", "Emm".

"What would this place have sold for last year?" "Last year is about US$ 2.2 million." "And this year?" "It's increased about three million."

Same story at this modest two bedroom apartment, selling for almost a million dollars, up from just 700,000 last year.

"What kind of people are buying these expensive places?" "Uhm, business people and then some wealthy Chinese, mainly."

But developers are building flashy new apartments faster than they can be sold. Fancy commercial properties stand empty. "Here on the outskirts of Beijing, entire villages have been razed to make way for redevelopment. And this goes on for miles." After an explosion of lending last year, analysts say there’s so much money moving in China. The government will have difficulty averting its fear, a big bad real estate bubble.

"With all of this liquidity sloshing around, we are going to see bubbles and you can, perhaps, prevent a bubble in one area of the market. But all you do that is push it into another area of the market."

Even if property prices drop in Beijing and Shanghai, analysts say they could rise in second and third-tier cities, and another bubble could be ready to pop.

Emily Chang, cnn, Beijing.