Special Report: Global Financial Crisis
BEIJING, Oct. 22 (Xinhua) -- China announced late on
Wednesday an array of policies, including tax exemption and mortgage deposits
reduction, to boost the falling real estate sector amid the global economic
downturn.
The People's Bank of China, the central bank, said in
a website circular late on Wednesday that the down payment for an initial
purchase of housing with a floor space of more than 90 square meters for self
use could not be less than 20 percent. Previously, the figure was 30 percent.
The new practice will take effect Oct. 27.
The interest rates on a mortgage for first time home
buyers would be cut by 0.27 percentage points to boost domestic consumption. The
floor for interest rates would be lowered to 70 percent of the central bank's
benchmark rate, the central bank said.
It said the adjustment was made to offset the
negative impact brought about by the widespread global financial crisis and to
stimulate domestic consumption amid the world economic slowdown.
The new policy demonstrated the central government's
determination to stabilize the property market and to maintain economic growth,
said Hua Wei, a professor with the Shanghai-based Fudan University.
The tax incentive can not be deemed as only to
stimulate the sector of real estate, it is also part of the macro economic
policy adjustment, according to Bai Jingming, deputy director of the Fiscal
Science Research Institute of the Ministry of Finance.
China's economic growth slowed down to 9.9 percent in
the first three quarters as the spreading credit crisis dampened foreign demand
for Chinese goods.
The stability of the property sector is significant
for the national economy as the sector contributes a quarter of domestic fixed
asset investment.
The sector, once overheated, plunged into recession
as the government had limited bank loans for property developers in a move to
restrain the runaway housing prices.
Property prices in major Chinese cities increased 3.5
percent in September from a year ago, the slowest pace in more than three years.
People's tendency to buy houses tumbled to 10-year
low. Insiders said the hefty transaction costs did not restrain the property
speculative activities, but refrain consumers from buying.
To facilitate house purchase for mid-and-low income
families, the Ministry of Finance said that starting from Nov. 1, the stamp tax
on property purchase and the value-added tax of land on property sales would be
lifted. The contract tax would be reduced to 1 percent on purchase of the first
unit of housing with a floor space of no more than 90 square meters.
The fiscal measures were unveiled shortly after the
interest rate cuts, which showed the government's resolution to sort out the
current problem, Hua said.
Bai Jingming said the new policy would coordinated
with the loosening monetary policy to help stabilize the property market and the
national economy.
The ministry said the construction of the low-rental
housing would be accelerated and the subsidies for low-income families would be
boosted. Living allowance for the people affected by the Sichuan earthquake
would also be increased.
Those moves aimed to ensure the basic living of the
low-income households and raise people's expectation for the economy. It also
intended to promote the healthy and stable development of the economy by fueling
domestic consumption, the ministry said on its website.
China has cut interest rates twice in one month, and
loosened the lending restrictions to prevent the world's fourth largest economy
from sliding.
It also raised the export rebates to boost export, which is the driving force of the national economy, as the trade surplus shrank 2.6 percent in the first three quarters from a year ago sapped by weakening foreign demand.
Property price in major Chinese cities
rises slower
BEIJING, Oct. 22 (Xinhua) -- China saw average
properties price in 70 major cities up 3.5 percent year-on-year but down 0.1
percent month-on-month in September, according to data released Wednesday by
National Development and Reform Commission and National Bureau of Statistics.
The year-on-year increase rate was 1.8 percentage points
lower than the August level. Full story
Property deals hit record low over the
Holiday
BEIJING, Oct. 7 -- Property transactions in China's major
cities hit a record low over the past National Day holiday as more potential
homebuyers adopted a wait-and-see attitude.
Statistics from the Beijing Real Estate Transaction
website revealed that the average number of daily deals over the holiday week
fell 72 percent year-on-year in the capital to 69 units, making it the worst
period so far this year for the property sector. Full story
Property sales in China continue
decline
BEIJING, Sept. 9 (Xinhua) -- China Vanke, the country's
largest listed real estate developer, said property sales revenue fell 35.2
percent in August 2008 compared to August 2007.
Sales revenue last month was 4.07 billion yuan (595
million U.S. dollars) the company said in a statement to the Shenzhen Stock
Exchange on Tuesday. This is the third consecutive month of decline. Full story
China's GDP up 9.9% in Jan.-Sept.
period
BEIJING, Oct. 20 (Xinhua) -- China's gross domestic
product (GDP) grew to 20.16 trillion yuan (2.96 trillion U.S. dollars) in the
first three quarters of this year, up 9.9 percent from the same period of last
year, the National Bureau of Statistics (NBS) said on Monday.
The growth rate was 2.3 percentage points lower than the
same period of last year, and half a percentage point lower than the first half.
Full story
NDRC: China prepared to combat
slowdown
BEIJING, Oct. 17 -- The government is ready to
introduce a series of measures to cushion the impact of slower growth in foreign
trade and industrial output caused by the global credit crisis, the
vice-minister of the National Development and Reform Commission, said Thursday.
Speaking at a press conference held by the State Council
Information Office in Beijing, Du Ying said that as the global economy has
slowed, foreign trade volume, value-added output and the profit growth of
industrial firms based in China's coastal areas have shown a downward trend in
the second half of the year. Full story
