Asia News
Real estate curbs working, Chinese government says
17 Aug 2012
The Chinese government has described as "effective" measures introduced last month to cool overheated property markets after a three-week investigation apparently designed to find the causes of the country's recent house price recovery.
The People's Daily - the Communist Party's official newspaper - said State Council officials were "generally satisfied" with regional implementation of measures including a cap on home-ownership in some cities and increased down-payments, although the government has as yet made no public statement on the results.
According to the People's Daily, officials approved implementation of measures in 16 of the 17 provinces and cities investigated.
However, easier availability of credit is more likely to have stimulated house prices in recent months than government attempts to curb real estate market "speculation". "The results may possibly form the basis for further curbs," warned the newspaper.
Credit Agricole senior economist Dariusz Kowalczyk said in a note last week he expected the government to push banks to extend more credit, despite evidence that corporate bonds and "new avenues of social financing" were beginning to plug the gap left by constrained bank finance.
"There cannot be a sufficient infrastructure spending boost without stronger lending," he said.
Author: Shayla Walmsley
