Did China Dodge a Bubble?

There has been talk over the past year or so of an asset bubble inflating in China. Its GDP had been incredibly high, inflation was increasing, and home prices were growing entirely too quickly to be sustainable. But the government intervention might be working. The New York Times reports:

The country's gross domestic product rose 10.3 percent in the second quarter, compared with an increase of 11.9 percent during the first quarter.
At the same time, inflation slowed to 2.9 percent in June, down from 3.1 percent in May and below the government's official target of 3 percent, according to the National Bureau of Statistics.
The government also imposed certain restrictions on property buying. June data suggest the market may be starting to cool. Average property prices in 70 cities declined 0.1 percent compared with the month before, the first drop since February 2009, according to China analysts for UBS Securities.

For the full story at the New York Times.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

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