The Enlightenment of the American Subprime Mortgage Crisis to the Development of China's Real Estate Industry

This paper examines the evolution of China's present real estate market and the illumination of the American subprime mortgage crisis through an analysis of the latter. The article explains and analyzes the causes of the subprime crisis, and then discusses its impact on the American real estate industry at that time. Subsequently, through the analysis of the supply and demand of the Chinese real estate industry, it is believed that China's real estate sector has three related points to the American real estate industry during the subprime crisis. Firstly, the excessive confidence in the US market and the large population of some cities in China. Secondly, the financial derivatives and the management of them in the US market and the Chinese market. Thirdly, the excessive issuance of personal credit in the US market and the loose regulation of property companies in the Chinese market. At the end of the paper, based on the experience learned from the US subprime mortgage crisis and taking into account the position of the Chinese real estate market today, preventive measures and countermeasures are put forward to provide a reference for future risk prevention.