The Chinese authorities have been properly handling its real estate market which will not collapse as what happened in Japan two decades ago, said Ann Lee, CEO of new technology investment consortium Coterie.
"I am more optimistic about China's real estate market," said Lee who is also author of a newly-published book Will China's Economy Collapse?
For one thing, the asset bubble in Japan was far worse than what China is experiencing and China can be relieved by comparing the asset prices, she said.
"It was really extreme there," Lee said, while talking about the situation in Japan in late 1980s. The Imperial Palace, located in the center of Tokyo, for instance, was said to be worth all the real estate combined in California at that time.
"So the scale is completely different," Lee said.
The Japanese government's adjustment of asset prices at that time though was also extreme, which led to the collapse of the economy, she added.
"Whereas so far we see in China, everything is very slow and modulated," she said.
She said the regulators' attitude also plays a key role in this regard. In Japan, regulators took action only when they sensed there was a huge asset bubble, whereas in China's scenario, they've been proactively learning lessons from other countries, such as the financial crisis in the United States in 2008.
China's policymakers have been trying to keep the real estate from overheating by requiring higher mortgage payments and limiting the number of homes that people can buy in big cities.
The property market in the country has also shown signs of cooling as prices have faltered in major cities amid tough government curbs.
Lee said China's regulators were pretty aggressive in trying to prevent the bubble from becoming too large, something not seen in Japan or even in the United States, where policymakers just left "the market to take care" until the bubble actually started bursting.
"There are lots of tools in the toolbox that the Chinese policymakers have in their disposal to address the issue and therefore I don't see them letting this become completely out of hand," Lee added.
