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And our next story takes us to China, where there are signs of a housing bubble in the making. Here are some of the indicators. Housing prices are way up. Property sales jumped 75 percent in the last year. And bank loans are at record levels. NPRs Louisa Lim reports from one of the places where housing prices are rising the fastest: Shanghai.

(Soundbite of music)

Unidentified Woman: (Singing in foreign language)

LOUISA LIM: Rise up, people who don't want to be slaves to their mortgages are the words to this satirical song. Its tune is the "Internationale," the anthem of international socialism. The lyrics say we should fight for houses, shatter the developers to pieces. Don't think were obedient. The consequences will be serious if we get mad. This song, protesting against high house prices, was written just over three years ago by songwriter Liu Shuqiu.

Mr. LIU SHUQIU (Songwriter): (Through translator) At that time, nobody could afford to buy apartments. We thought prices were at their peak. We never couldve known that over the years, it would get worse and worse.

(Soundbite of music)

LIM: In fact, house prices are almost two-and-a-half times higher now than when that song was written. A new Shanghai apartment now costs 68 percent more than it did a year ago, according to Knight Frank property agency. It says prices rose by 40 percent in many other mainland cities. Now ordinary people fear theyre being priced out of the market, while the luxury sector is soaring.

James Zhuo is a property agent for Century 21, working in Lujiazui, one of Shanghai's most expensive areas. He describes the type of customer who was buying last year - in this case a coal-mine millionaire from the inland province of Shaanxi.

Mr. JAMES ZHOU (Property Agent): (Through translator) Last year, one of my customers arrived in a BMW, lugging two suitcases. Each suitcase contained the equivalent of about $70,000. He said, I've brought this money to buy a villa.

LIM: Even Chinese Premier Wen Jiabao admits that property prices have risen too quickly. The government is trying to stop speculation by re-imposing resale taxes and raising downpayments for second homes. Many fear China is in the grip of a property bubble. Experts say the problem isn't the same as the subprime mortgages in the U.S.

Professor VICTOR SHIH (Northwestern University): The entities that are doing the leveraging in China are not individual people, but instead local government entities which have borrowed trillions from the banking system to develop real estate projects in the first place.

LIM: Victor Shih, of Northwestern University, has been researching local governments' finances in China. He says, for example, about half of the Shanghai government's revenues come from land sales. And because local governments need this income, he fears cooling measures might not work.

Prof. SHIH: Local governments now are forming their own real estate developers and would actually buy land from itself. As this becomes more common and it is becoming very, very common then local governments have a high stakes in maintaining and increasing the value of real estate in their own jurisdiction. Therefore I think local governments may intentionally ignore a lot of measures that are meant to deflate real estate prices.

LIM: But not everyone is convinced there is a property bubble. Some analysts cite continuing housing demand, fueled in part by the millions of rural migrants moving to the city. Lu Zhengwei, the Industrial Banks macroeconomic analyst, says prices are likely to continue going up in the medium term.

Mr. LU ZHENGWEI (Macroeconomic Analyst, Industrial Bank): (Through translator) Economists say the biggest factor in housing prices is demographics, and China's working population doesn't reach its peak until 2030. So I think China still has 15 or 20 years of growth, with some fluctuations because of macroeconomic controls.

(Soundbite of TV show, Dwelling Narrowness)

Unidentified Woman: (Foreign language spoken)

LIM: Bubble or no bubble, official figures show 85 percent of Chinese can no longer afford to buy properties. The authorities are certainly worried about social instability. That much is clear from the popularity of this television soap opera, Dwelling Narrowness. It charts two sisters' struggles to buy an apartment, with one of them eventually becoming the mistress of a corrupt official. It coined a saying: To buy a place in Shanghai means you are digging a grave for yourself and burying your love. The soap opera has now been pulled from the air.

Louisa Lim, NPR News, Shanghai.

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