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People's Daily Online>>China Business

Car, house purchase controls slow growth pace of Beijing economy

(Xinhua)

16:27, December 22, 2011

BEIJING, Dec. 22 (Xinhua) -- The economic growth of Beijing dropped two percentage points this year, largely as a result of controls implemented on car and home purchases, which were intended to ease traffic jams and rein in rocketing home prices, according to a top municipal official.

The relocation of Shougang Group, a heavyweight steel maker, also contributed to the slowdown of the city's gross domestic product (GDP), said Liu Qi, secretary of the Beijing Municipal Committee of the Communist Party of China (CPC).

The iron and steel making facilities relocated to Caofeidian of Tangshan City in Hebei province as part of Beijing's efforts to reduce pollution.

Despite the shrinkage, Beijing can still reach its goal of 8-percent GDP growth, said Liu at a plenary session of the committee, which was held from Dec. 19 to 21.

The municipal government decided to limit the number of new cars on the road by controlling the issuance of new license plates. This year's quota was set at 24,000, compared with more than 80,000 new plates in 2010.

To get a license plate requires participation in a monthly lottery process run by the municipal government.

Car sales contribute to one third of Beijing's retail sales, while the property sector accounts for more than 50 percent of the city's investment, and contributes more than 20 percent to its fiscal revenue, according to Liu.

Beijing is one of the pioneer cities that have imposed a raft of measures aiming to rein in housing prices amid nationwide concerns about an overheated economy since April 2010. These measures include higher down payments, home ownership limits and less access to loans.

Although the control measures and the relocation of Shougang have resulted in the slowdown, the city has witnessed robust growth momentum in cultural and creative sectors this year, and the city is relying more on technical and cultural innovations for economic growth, Liu said.

 
 
 
 
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