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This story in MarketWatch tells of one of the hottest new property markets in the world, just off the southern coast of - you guessed it - China, where rising prices make the 10 percent gain on the mainland during the month of January look almost tame by comparison.

It's home to a submarine base, a recent host for the Miss World beauty pageant, and it draws the likes of action hero Jackie Chan and legendary financier George Soros. And now China's southern island of Hainan can add another distinction -- the nation's newest hot property market.

Real-estate prices on the island, where white-sand beaches and jungle-covered mountains have earned it associations with Hawaii, have jumped by more than one-third in the last five weeks.

And in Sanya, one of the island's main resort cities, luxury condos have risen as much as 40% since the start of the year, bringing prices close to similar properties in Beijing and Shanghai.

A good part of the real-estate spike comes from Beijing's announcement in early January that the island would be developed into a major international tourism destination by 2020.

As was the case in the U.S. about seven years ago, policymakers in China are probably now thinking that it's much easier to deal with asset bubbles than with the alternative - a sluggish economy and rising unemployment.

You'd have to think that this sort of an approach to managing the global economy can't persist for too many more years before something really bad happens and this is probably why so many commentaries are popping up lately about how future sovereign credit crises will make the bank credit crises of 2008 look like a cake walk.

Source: Hainan: Where Home Prices Jumped 33% in 5 Weeks