Why Chinese government decided t

We know the fundamental principle in economics is the famous formula:

Supply = Demand.

But the reality is always Supply > Demand in nowaday China.

Why?

Demand is basicly composed by three carriages:

Investment, Consumption, and Export

But the truth is:

Demand ---- Overplus;

Consumption ---- Fatigue;

Export ---- Recession.

How to do?

Expand the consumption;

Maintain the investment;

Exploit the export.

In consideration of the current situation in China, the first option is the best and most efficient choice.

Now is another question:

Is real estate consumption or investment?

Analysis:

Real estate seems like consumption, but now in China it more looks like investment. Since civilians can't afford the extremely high price. As an investment, buyers do not only want to lose their money but also try everything to maintain and enhance the price of their properties, so does the government and developers.

The consquence:

The money which should have been spent on consumption now is used to buy(or invest in) real estate, which expains the phenomenon that M2 declines as the monetary supply rises.

So, since options on expanding demand all failed ( if not, at least can't say it is success), there is only left the last choice:

Optimize supply or supply-side structual reform

But is it easy to achieve?