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local authorities

local authorities

Land Privatization Can Stall Rising House Prices in China

4y ago


Follow us on TWITTER: Like us on FACEBOOK: In some cities, property value in China has consistently risen, and has hit new records, both in sales volume and prices. The Land & Resources Ministry and Housing Ministry of the Chinese Communist Party (CCP) regime has jointly issued an urgent notice on tightening real estate control. This was the ninth official action in the last two months attempting to curb the property market. Professional observers say that land privatization is the most effective way to pull down housing prices. Latest official data shows a month-on-month increase in housing prices in 25 cities this June. Related high-level CCP authorities, including Housing Ministry, the Reform Commission, Central bank, and the Land & Resources Ministry have all lined up to support control of real estate. On July 7, Wen Jiabao claimed to create a long-term policy to curb speculative demand in the real estate market. He Junqiao, a Business Consultant, China: "If it doesn't curb soaring housing prices, an Asian financial crisis would recur. That's a serious aftermath that the central authorities have realized." However, He Junqiao says that the CCP regime is not truly aiming to tame housing prices in China. He Junqiao: "I don't think the official tight control plans are really intended to curb housing prices. Nor are they to suppress the overheated real estate market in China. We all know if the property market stops and plummets like the stock market, China would encounter economic doom. Official policy just aims to slightly curb housing prices, rather than suppress it to levels affordable to Chinese civilians." Land sales have become the main source of nationwide fiscal revenues for local CCP authorities. This income also ensures collection of some local tax revenues. A local Land & Resources officer said that without land sales, local authorities have no way to get money to pay salaries. Hangzhou City was reported to have "negative growth in fiscal revenue" in the first half of 2012. It had to seek financial aid from provincial-level authorities. Symptoms similar to Hangzhou's suffering is rampantly spreading across China. Duan Shaoyi, Economist: "The house price bubble in China's major cities have become very serious now. Its root cause is still the economic system. That is, China's land resources have not been put to good use." He Junqiao said that 30 years of reform and opening up has resulted in an economy driven by sales of land and reinforced concrete, which exhausts resources for the next generation. The fact shows that the regime has no capability to solve China's economic problem. He Junqiao: "The major push behind the crazy surge in house prices is known to come from the government. As land resources and the banking system are both controlled by it. In other words, local authorities are the largest beneficiary of the housing price rise. So we attribute house price increase to the official policy of land sale-sourced revenue." What can be done to tame the ever-rising house prices? How to purge corruption bred by the land sale revenue? Duan Shaoyi says that if the authorities legalize land privatization, property value would instantly fall. Duan warns that the rebound effect caused by the official real estate control could bring a greater disaster to China's economy. 《神韵》2011世界巡演新亮点