Despite a promising economic outlook, China still has some problems in its economy, and one of them is surging home prices.

Over the past month the government has rolled out measures to curb soaring property prices and stop speculation, but they would take time to work, according to economists and industry insiders.

Heading for crash?

A recent New York Times story sternly warned that China's economy was headed for a crash, citing James S. Chanos, a Wall Street hedge fund investor.

"Its (China's) surging real estate sector, buoyed by a flood of speculative capital, looks like 'Dubai times 1,000 -- or worse'," said Chanos.

Wang Xiaoguang, a researcher with the Chinese Academy of Governance, said nobody would believe China's property market did not have bubbles.

He said that a record surge in bank lending in 2009 coupled with the government stimulus package had created a relatively big bubble in China's economy.

"China's real estate market is plagued with big bubbles, creating great risks for the financial sector," Yi Xianrong, a researcher with the Chinese Academy of Social Sciences, had said.

Wang Zhaoxing, vice chairman of the China Banking Regulatory Commission, said Wednesday at a conference that currently loans to property developers and residents to buy homes accounted for 20 percent of total new loans. He did not mention the time period.

However, Wang Xiaoguang, among other experts, expressed disbelief in Mr. Chanos's "crash theory".

"Bubbles do exist, but China's economy is not heading for a crash. And the claim that China's property sector is more inflated than Dubai's is a huge exaggeration," Wang said.

"China's property market and Dubai's are not comparable," said Yang Hongxu, a property researcher at E-House China R&D Institute.

Yang gave the example of Shanghai, a major city in east China. He said price hikes in Shanghai mainly stemmed from rapid economic growth, population expansion and increased residential income, factors which Dubai lacked.