Economist red-faced over Shenzhen property bet

Embarrassed mainland economist Xu Dianqing has apologised over his bullish bet on the Shenzhen property market a year ago, adding fuel to an already heated debate on the subject.

Professor Xu was quoted by mainland media during last year's housing boom as saying that Shenzhen property prices would continue to rise in line with economic principles.

'Let's be a bit more candid. If Shenzhen's housing prices are one fen lower [in a year's time] than they are now, I will take out a full-page newspaper ad as an apology to Shenzhen residents,' the professor said at a forum in Shenzhen on July 11 last year.

Professor Xu, a part-time professor with Peking University's China Centre for Economic Research, admitted in his blog on Tuesday that he was wrong.

The about-face comes as the world economy continues to reel from the subprime crisis in the United States and mainland stock markets shed more than half of their gains since the beginning of the year because of economic uncertainties. Natural disasters have also had an impact, particularly the Sichuan earthquake of May 12.

Along with other major cities such as Beijing and Shanghai, Shenzhen has ridden a property boom in the past four years, with housing prices rising to records of about 19,300 yuan (HK$21,980) per square metre in August last year.