Economy

Real estate support to stay

By Jiang Jianguo and Zhang Dingmin (China Daily)
Updated: 2010-06-05 09:10

A migrant worker looks at a housing development under construction in Beijing. Property prices in 70 Chinese cities rose by a record 12.8 percent in April from a year earlier after climbing by 11.7 percent in March and 10.7 percent in February. Jin Guo / for China Daily

SHANGHAI - It's not yet time for China to reduce or stop policy support for the nation's real estate industry, said Li Fuan, an official with the China Banking Regulatory Commission.

"Real estate in China is far from being at the end of its development and we are far from the point where we no longer need to support the industry, where we need to reduce or stop support," Li, head of the commission's banking innovation department, said at a forum in Beijing on Friday.

Concerns among investors that China will introduce a property tax and other policies to curb home prices fueled a 30 percent fall this year in an index tracking 34 real estate companies traded in Shanghai.

China has already limited loans for third-home purchases and tightened down payment requirements, aiming to cool a market where growth in property prices topped 10 percent for three straight months.

Real estate "will be an important industry that continuously supports China's economic growth for the next 10, 20, 30 and even 40 years", Li said. The real estate industry needs as much as 60 more years of development before living standards nationwide can be brought to a "harmonious" and "well-off" level, he said.

Property prices

Related readings:  Real estate business volume slumps  Real estate developers to face financial difficulties: report  China real estate bubble bursts in bond market  Real estate a 'major business' of billionaires

Property prices in 70 Chinese cities rose by a record 12.8 percent in April from a year earlier after climbing by 11.7 percent in March and 10.7 percent in February, according to government data. The price gains spurred concerns that a record $1.4 trillion of loans extended last year to combat the effects of the global financial crisis were causing asset bubbles.

Premier Wen Jiabao, in a speech to the country's annual parliamentary meeting in March, pledged to crack down on property speculation.

China's tax bureau on Thursday announced minimum rates for pre-paid land taxes. The minimum rate for eastern China was set at 2 percent, the rate for western China was set at 1 percent and the rate for central and northeastern regions of the country was set at 1.5 percent, according to the State Administration of Taxation.

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