Policy

Curbs on realty buys to remain in 2011

Date Jan 04 2011 13:55:37

Jan.04,2011(SHMET)--Local governments in many cities will continue restricting home purchases into the new year, in response to the central government's efforts to further curb property price increases in 2011.

Fuzhou, Xiamen and Haikou, which saw their home purchase restrictions expire on Dec 31, said they will extend the moves in 2011, according to Xinhua News Agency.

So far, there are more than 10 cities in the country imposing restrictions on home purchasing, either by limiting the number of homes a family can purchase or by stopping mortgages for foreigners.

The local governments of the three cities have a term of validity for the move, while similar policies of others are temporary.

Meanwhile, relevant government departments in Beijing, Shenzhen and Guangzhou also said recently they had no plans to cancel their home restriction policies.

Industry experts said such measures should continue as effective ways of controlling speculative home purchases.

"If the property price growth picks up this year, there will be more tightening measures rolled out, and the number of cities that restrict home purchase will also grow," said Yang Hongxu, an analyst with Shanghai-based E-house China Research and Development Institute.

Minister of Housing and Urban-Rural Development Jiang Weixin said at a national conference that China will crack down on speculative home purchases and curb excessive growth in property prices this year.

The government will also strengthen the implementation of tightening measures unveiled in 2010.

The country has rolled out a string of tightening measures to cool the market, including suspending mortgages for third-home purchases, speeding up trials of property taxes, raising down-payment requirements for first-time home buyers as well as only allowing foreign citizens living in China to buy one home for their own use.

All these policies have "helped contain speculative demand to some extent", Jiang said.

Despite the rigorous real estate policies, many large-scale property developers have met their sales targets in advance.

Statistics from World Union Properties showed that at the end of November, Vanke, Evergrande Gemdale and Sino-Ocean Land had realized their annual sales targets as they strengthened their presence into second- and third-tier cities and consolidated their financing channels.

To hedge risks, a number of leading property developers including Greentown, Vantone, Beijing Capital Land and Hair Real Estate have also been preparing to set up their own real estate funds.

Shenzhen-based Gemdale has set up its first yuan-denominated fund with the scale at about 500 million yuan ($73.5 million).

According to World Union Properties, the world's major investment banks have set up 33 yuan-denominated funds in China, with most of them eyeing opportunities in the real estate sector.

Edited by SHMET

PBOC to focus more on core inflation for monetary policy

Date Dec 31 2010 13:02:59

Dec.31,2010(SHMET)--Core inflation should be considered more important than the consumer price index (CPI) when the People's Bank of China (PBOC) makes short-term monetary policy decisions, said a senior official of the central bank on Thursday.

Core inflation, a measure of inflation which excludes certain items that experience volatile price movements (notably food and energy) could reflect basic price fluctuations more accurately and reduce the influence of temporary factors on monetary policy, Sheng Songcheng, the head of the financial survey and statistics department of the People's Bank of China, wrote in an article published on the bank's website.

Between January and November, the benchmark CPI, in which prices of fresh food and energy are omitted, was 1.6 percentage points lower on average than the official CPI rate announced by the National Bureau of Statistics, said Sheng.

"The trend of benchmark CPI was basically in line with other emerging markets," he said.

The country is facing inflationary pressures after CPI, a main gauge of inflation, accelerated to a 28-month high of 5.1 percent in November

To soak up excessive liquidity and curb inflation, the central bank has raised the reserve requirement ratio for banks six times and increased interest rates twice this year to support healthy economic development.

In addition, it increased the benchmark lending rate to commercial banks by 52 basis points to 3.85 percent, and raised the rediscount rate (the interest rate at which financial institutions borrow from the central bank) by 45 basis points to 2.25 percent on Sunday, both increases were the first for two years.

Zhou Xiaochuan, China's central bank governor, said in an earlier interview that the country's monetary moves such as raising interest rates are more closely related to the core inflation situation than the official CPI figures.

The governor said that China's core inflation had increased in the second half of this year, but maintained that this was normal considering the effects of the stimulus package adopted during the global financial crisis.
 
"That means our adjustment of monetary policies need to be as timely as possible," said Zhou.

"The central bank has to maintain a balance between economic growth, employment, consumer prices and international payment.

"Under different economic conditions, the monetary policy priorities would be different," said Sheng, adding that the acceleration of international capital inflows is another barrier hampering the government from raising interest rates.

He said that when the economy is stable, the central bank usually focuses on price stability, but when the economy goes into depression, growth becomes a top priority.

"But generally, the major target of monetary policy is to stabilize prices," he added.

Apart from consumer prices, the fluctuation of asset prices is also an import factor the central bank has to take into account, said Sheng.

"Dramatic changes in asset prices, especially real estate prices, indicate a change of currency value in itself," he said.

Because it is technically difficult to combine asset prices with CPI as a general measure of price fluctuation, the central bank needs to track asset prices carefully, and let the market determine interest rates to better stabilize prices, Sheng said.

Edited by SHMET

China to enhance regulating property market

Date Dec 30 2010 17:06:25

Dec.30,2010(SHMET)--China will enhance regulating its property market in 2011 and strengthen implementation of the tightening measures already unveiled by the government, a senior official said Wednesday.

Jiang Weixin, minister of Housing and Urban-Rural Development, said at a national work conference that China would clamp down on speculative home purchases and curb excessive growth in property prices next year.

The country has rolled out a string of tightening measures to cool the real estate market in 2010, including suspending mortgages for third-home purchases, speeding up trials of property taxes and raising down payment requirements for first-home buyers, which have "helped contain speculative demand to some extent", Jiang said.

Further, Jiang noted that the ministry would assess local governments' performances in stabilizing property prices to ensure central government measures are properly implemented.

China will also continue to increase the land supply available for residential property and strengthen management of the Public Housing Fund in 2011.

The country built 5.9 million units of affordable housing and renovated 1.36 million dangerous rural dwellings in 2010, compared with the annual target of 5.8 million units and 1.2 units, respectively, Jiang said.

Further, China will increase the supply of affordable housing, renovate more shantytowns and develop public rental housing to solve the housing problem of middle- and low-income earners, the newly-employed and migrant workers, Jiang said.

Edited by SHMET

Car registration limit to vary each year

Date Dec 29 2010 09:17:29

Dec.29,2010(SHMET)--"Beijing will control the number of registered vehicles next year to 240,000. The number will be decided by each year's traffic capacity from now on," Li Xiaosong, deputy director of Beijing Municipal Commission of Transport said, The Beijing News reported Tuesday. 

According to Li, the traffic measures unveiled Dec 23 have undergone much consideration. "The city's vehicles increased to 2 million in 5 years while Japan took 22 years," he said.

City officials introduced 28 measures to ease congestion and ensure transportation safety in China's capital.

An authority with the commission told the reporter that though the number of registered vehicles will vary each year, the number of plates they allocate will be in accordance with the traffic measures, which reserve 88 percent for private cars, 10 percent for public cars and 2 percent for commercial use cars every month.

Edited by SHMET

Banking industry introduces director elimination mechanism

Date Dec 29 2010 09:15:07

Dec.29,2010(SHMET)--China's banking regulator has rolled out a regulation to assess the qualification of commercial banks' directors, requiring banks to promptly replace unqualified directors, the 21st Century Business Herald reported Tuesday.

The regulation, issued by the China Banking Regulatory Commission (CBRC), established the assessment and elimination mechanism for bank directors. It is the first such regulation by CBRC targeting individuals in company supervision.

Directors will be labeled qualified, basically qualified or unqualified. Basically qualified directors need to improve their performance within a set time if they want to maintain their positions.

The regulation also stipulates one person can not act concurrently as directors of competing banks. Currently, it is common for one person to serve as director of two or even more banks at the same time.

The CBRC will also release regulations on members of supervising committees and senior management in the future, the report said.

Edited by SHMET