China must stick to property tightening -paper

BEIJING: China must maintain curbs on speculative housing demand as the benefits of the crackdown will outweigh the drawbacks, the People's Daily, the mouthpiece of the ruling Communist Party, said on Thursday, Sept 9.

In a commentary, the paper said the measures would make prices more affordable for Chinese eager to get a foot on the property ladder, overriding the short-term hit to economic growth.

Property transactions have shown signs of a rebound in recent weeks, as have some prices, and a number of industry analysts warn that Beijing could roll out further tightening steps if developers raise prices to take advantage of a traditional busy selling season in September and October.

China launched a slew of measures in April to cool the red-hot real estate market, in part to ease popular complaints that many people are unable to afford record home prices.

"This round of property tightening is an important step to improve people's lives and promote a harmonious and stable society. We must firmly stick to it," the paper commented.

The newspaper's views are usually taken as representing official policy.

If China could increase affordable housing construction, the impact of the tightening on the country's investment growth as well as on related industries would be short-lived, it added.

The comments were echoed by Xia Bin, a cabinet adviser, who was quoted by the official China Securities Journal as saying that Beijing would continue with its property tightening drive.

He said there was no need to panic about a moderation in economic growth over the rest of the year. Such a trend was expected after Beijing acted to cool the housing market, tighten loans to local government financing vehicles and close down obsolete, energy-intensive plants.

Gross domestic product growth slowed to 10.3% in the second quarter from 11.9% in the first three months. -- Reuters
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