China has popped it's own real estate bubble, and has publicly signaled it will continue to allow the bubble to burst. I am mildly surprised China is NOT fighting the popping of it's own real estate bubble like America did. Sure, China behind the scenes is probably taking steps to prevent an complete freefall. But to signal that they won't re-inflate the real estate market is very astute.
Further, China is changing leadership next year. This combination is setting to be one hell of a rocket ship investment. Bottom I think (to be seen) is second half 2012, or first half 2013. That will be the time to buy Chinese stocks, and maybe a better investment than gold!
It all depends on politics, if the next regime can convert the Chinese economy to consumption, and take out the US as financial engine. This unfortunately also supports me looking for USD collapse in 2013-2017.
For more information, and a great summary, see this Mish article titled "China Prepared to Let Housing Prices Sink in Spite of Economic Slowdown; Transition to New Regime Underway; Decoupling in Reverse".
China’s Deserted “Fake Disneyland”; Shanghai Prices Down 40% from Peak, Inventory Clogs Market; Pollyannas Proven Wrong; Implications for US Dollar