‘Hard landing’ fears over ... but just when will China’s property bubble burst?

Third-quarter figures due in the next few days are expected to reflect a calm few months for the Chinese economy despite simmering property bubbles in some cities, economists said.

With investment stabilising, industrial deflation easing and industrial production accelerating, fears about an imminent hard landing in the world’s second-biggest economy have abated since the summer, but warnings over frothy housing prices in major cities such as Shanghai and Nanjing have grown louder.

With the growth target for 2016 more or less secure, China’s monetary authorities are likely to stay prudent to keep property prices in check and to cope with possible rate increase by the US Federal Reserve later this year.

China’s fiscal authorities will also continue to loosen purse strings but an all-out post-crisis stimulus is off the table.

“Data for September will be similar to August”, when all major economic indicators were stronger than expected, said Suan Teck Kin, a senior economist at United Overseas Bank.