It is not clear to me, why the real 3-year deposit rates are used, but, probably, due to best visual fit. However, the economists at JPMorgan note:
At the root of the Chinese property market’s boom-bust tendency is the lack of investment alternatives for the average Chinese citizen. As Figure 15 shows, investors are more inclined to channel their funds into real estate when deposit rates are at low or negative levels. While the government’s administrative measures may help stabilize the sector in the short-term, capital market reforms and the broadening of both onshore and offshore investment options are necessary preconditions for stability in the long-term.
Eehhh, imagine what happens, if capital account goes free?
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