Housing market regulations unlikely to hurt economy

16:56, September 16, 2010      

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Despite the dip in China's economic growth rate since the second quarter of 2010, it is unnecessary to worry about the drop in China's future economic growth, said Ma Jiantang, commissioner of the National Bureau of Statistics of China, at the Summer Davos Forum held in Tianjin on Sept. 15. He believes the housing regulatory and control measures are unlikely to pose much influence on the economy.

No need to worry about drop in economic growth

China's economy has been recovering from the international financial crisis since 2009. China's economy grew at nearly 12 percent in the first quarter of 2010, and its growth rate dropped to about 10 percent in the second quarter. The focus of discussions about China’s economy has shifted from whether it was too hot in the first quarter to whether it would experience a double-dip recession in the second quarter.

Ma said that he was not worried about the drop in economic growth. He said that the concern over the Chinese economy is not how much the growth rate will drop but how to transform the economic development mode in a more effective manner, enhance efficiency of resource utilization and strengthen environmental protection in the process of stable and relatively rapid economic development.

Ma believes that inflation is currently being controlled at a moderate level. The CPI stood at 3.5 percent in August versus an average of 2.8 percent for the first eight months. Around 3 percent is universally considered to be a mild level of inflation.

If China's economic growth rate in 2010 can maintain around 10 percent in 2010, controlling inflation at a level of around 3 percent will not only help maintain stable economic growth, but also enable China to put more effort into transforming the economic development mode and enhancing the quality of economic growth.

Housing regulations will certainly exert some influence

Housing regulatory and control measures have been released frequently since mid-April of 2010.

"China's regulation and control of the housing market will certainly exert an influence on its economic growth but I do not think the influence will be substantial," Ma said.

Ma explained that the development and investment in real estate accounts for one-fifth of total social investments. Although the central government has taken measures to control it, the real estate investment growth rate in the first eight months was still as high as 37 percent. In addition, real estate does not account for too much of country's GDP, and the area sold in the first eight months has increased by around 6 percent.

The data published by the National Bureau of Statistics shows that housing prices nationwide in 70 cities rose by 9.3 percent in August compared to the same period of the previous year. The price rise decreased by one percentage point from July. Data from first-tier cities shows that the turnover in the property market has begun rebounding.

According to sources, the National Bureau of Statistics has conducted an investigation on the vacancy rate in Beijing, Tianjin, Shanghai, Guangzhou and Shenzhen. It has considered preparations for introducing new regulatory policies.

By People's Daily Online


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