nine of my 10 tour guides and translators had purchased homes in China, and one of them even had bought three.

This round of inflation started to pick up momentum last year and is going along with the property market boom. Although China's housing prices have risen in the past decade, the biggest price surges happened in 2006 and 2007. In 2004, the average home price in Beijing was 5,050 yuan ($740) per square meter, but it skyrocketed to 14,000 yuan ($2,049) per square meter in 2007, which directly led to an overall consumer price surge.

Some people contend that housing prices are going down with shrinking volume, and if the government does not take measures to stabilize the property market, overall macroeconomic safety will be seriously affected. Is it the right time to suppress the real estate industry?

I have thought of this question over and over again. Needless to say, property developers are very adept at propaganda and know exactly how to manipulate publicity. They hire a large number of so-called scholars and experts so that these people can use their influence to entrap potential buyers. In the first five months of this year, property development space grew 24.9 percent, and residential property development space surged 26.6 percent. Under such cheerful circumstances, they hired those experts to grieve for them, attempting to force the government to let go of its stringent monetary policy. Their greediness is endless and must be brought under control.

If housing prices continue to soar, the property market will soon crash. As far as I know, home sales in some big cities have dropped. Take Beijing for instance. In the first five months, commercial housing space for sale decreased 46.1 percent, while residential housing space fell 48.8 percent. The sharp drop showed last year's housing price surge had surpassed market sustainability and that the bubbles needed to be cleared. Otherwise, ordinary citizens could not sustain such high home prices.

People are wondering if cracking down on property bubbles will hurt macroeconomic stability. In my opinion, now that the property industry has become the culprit of inflation, we must totally burst its bubble and deal with it seriously. If we take action early on, we can minimize the losses. I believe now is the best time to crack down on property bubbles.

First, from the perspective of banking risks, some people argue that 80 percent of developers' money is borrowed from banks. Therefore, if anything goes wrong with the property market, banks will suffer from losses on huge non-performing loans.

But the truth is, the banks issued most mortgages to developers for houses and land before 2005 when properties were quoted at very low prices. At present, if the real estate developers cannot repay the loans, the banks can rescind the mortgages, which now are valued at a much higher price. The banks would face no risks even if the developers went bankrupt.

But if we are determined to bring the property market under control in the next two years, the risks will be much higher, because mortgages now are quoted at much higher prices. At that time, banks will face disastrous risks.

Second, from the perspective of the macro-economy, it is better to take action now to rein in the real estate bubble rather than later. On the one hand, overall economic development is safe and sound at present. Even if there is fluctuation in the property industry, we can still maintain an 8-percent GDP growth rate. On the other hand, housing demand from citizens is high. If we burst the bubble caused by property speculators, homes will be more affordable so that ordinary citizens can buy them.