1. China's housing market will correct.
The over-investment in housing will finally catch up with China, with property prices falling and many investors getting burned. Still, the correction will disappoint the doomsayers given that China's mortgage debt remains modest by Western standards. Banks will face higher non-performing loans because of the credit they have extended to developers. All in all, a housing correction — though painful — will be much needed to prevent an even bigger bubble, and China's government will announce policy measures to soften the housing correction.