QE3 not to push up the housing price in China: ABN AMRO

The US Federal Reserve's latest QE3 announcement will not push up the housing price in China's mainland, an economist of ABN AMRO said here on Tuesday.

QE3 will promote more capital flow to go to risky assets such as equity market while the attractiveness of government bonds will decline, Maritza Cabezas, senior economist of ABN AMRO Private Banking, said at a press conference.

Maritza said, in the case of China, it is clear that the goal of Chinese government is to keep the property market as stable as possible and avoid excesses.

"Because the framework that has been adopted in China in the property market remains tight, I think that is really not the channel where it (the capital) will filter through", she said.

Maritza said, since the second quarter this year, China's economy activity has been showing some signs of weakness. Besides, external headwinds have only increased, leading to a further deterioration in external demand. This has led ABN AMRO to lower down China's GDP growth forecast for 2012 to 7.5 percent from 8 percent.

However, according to a report released by ABN AMRO earlier this month, this is not a big change and after all China continues to be one of the fastest growing economies.

Maritza said, Beijing is now in pursuit of a rebalancing the economy, China's government "have decided to lower the GDP growth level in order to gain a more sustainable model".

China Construction Bank said Monday that it intended to purchase a European bank. Maritza said it is a good timing to purchase stocks in euro zone financial markets because the stocks are now valuated at a very low price, while the economy begins to recover which will lead to the appreciation of stocks.

Nevertheless, she also said as an institution, China Construction Bank should also take a number of elements into consideration ranging from regulation to operation perspectives. Maritza believed that China will be very cautious about stepping into the European financial system.