Analysis: China property curbs in focus ahead of parliament meet
By Langi Chiang and Nick Edwards
BEIJING (Reuters) - China's property market is rife with speculation - both about rising house prices and about what the new government may do to curb them once it takes office next week.
Asset prices have whipsawed as investors first bet that government-mandated infrastructure spending would boost real estate prices, only to then fret about new measures to cool a market that has seen double-digit annual price rises in cities like Beijing and Shenzhen.
Markets appear more nervous than the government about the pace of price rises revealed by official January housing data issued last week, and economists at influential state-run think-tanks reckon investors are right to be worried that the new government is preparing to widen a pilot property tax as part of a broader reform of land and fiscal policies.
"China needs to establish a long-term policy system. Right now restrictions only target property transactions," Sun Xuegong, an economist with a think-tank under China's powerful National Development and Reform Commission, told Reuters.
He said China urgently needs a blueprint to stabilise the real estate market, and Xi Jinping and Li Keqiang - set to take over as president and premier, respectively, at China's annual meeting of parliament from March 5 - would not shy away from delivering one.
Wang Jun, an economist with the China Centre for International Economic Exchanges (CCIEE) think-tank, believes the only thing holding back new property tightening measures has been the political transition. "Any breakthrough is impossible in the current government's last month in office," he said.
He said repeated assurances to curb home prices during outgoing Premier Wen Jiabao's decade in charge had clearly failed and the new leadership would be determined not to let history repeat itself.
LOOKING FOR CLUES Continued...