This study explores the relationship between external dependent economic structure,surplus monetary liquidity and real estate bubbles in China.Employing monthly data from 28 Chinese provinces over the period 2004-2005,we test whether real estate bubbles are caused by structural surplus monetary liquidity,ccontrolling other possible factors.Our empirical findings show that the growth of pvivate savings in the banking sector,as an index of surplus monetary liquidity,ferments real estate bubbles regardless of the different development level across the 28 provinces. This study explores the relationship between external dependent economic structure, surplus monetary liquidity and real estate bubbles in China.Employing the monthly data from 28 Chinese provinces over the period 2004-2005, we test whether real estate bubbles are caused by structural surplus monetary liquidity, ccontrolling other possible factors. Our empirical findings show that the growth of pvivate savings in the banking sector, as an index of surplus monetary liquidity, ferments real estate bubbles regardless of the different development level across the 28 provinces.