久久亚洲国产成人影院-久久亚洲国产的中文-久久亚洲国产高清-久久亚洲国产精品-亚洲图片偷拍自拍-亚洲图色视频

  Home>News Center>China
       
 

Bubbles from 'stir-frying' houses
By Yi Xiangrong (China Business Weekly)
Updated: 2004-05-12 16:33

China's real estate market has undergone many changes in recent years.

In that time, a group of property speculators from Wenzhou, in East China's Zhejiang Province, has emerged and is attracting a lot of attention.

Disputes and doubts

The well-financed group usually buys a lot of houses at one time, and sometimes several buildings or houses in one area, and then sells them at higher prices. Wherever the group goes, local house prices skyrocket.

Their buying is not limited to Zhejiang Province, and they have purchased a considerable number of houses in major cities such as Beijing, Shanghai and Shenzhen.

Various opinions have been formed about the house buyers.

Some look down upon on them. They maintain the groups are no more than speculators who are manipulating the local real estate market, making very good profits and creating a bubble in the economy that is expected to break eventually.

Others, however, think highly of them. In their opinion, they think the real estate market will be pushed forward, and GDP (gross domestic product) and tax could be increased as well.

Although the pros and cons do make sense, none is not grounded on the assumption that the domestic real estate market is well developed, with clear title and open competition.

Given such a background, who dares say that these activities which I may term "stir-frying" are not legal?

However, how about China's real "real estate market"?

Is the market perfectly legal? Is it fair competition? Who may possess land? Who takes the leading role in growing land prices? Who gets the eventual profits? Who are the victims?

Price rigidity

The present domestic real estate market is monopolized instead of being well-developed and competitive.

Basically, any enterprise that wishes to become a player in the real estate market is required to own land.

Suppose that the land market is a normal, public and transparent one, then the government could provide lands in a continual and moderate way, and so balancing supply and demand.

Revenues obtained from land sales could be managed well by the government, thus preventing land sellers from making exorbitant profit.

However, traditionally selling and buying land in China is done through private contract.
Only a few cities, such as Guangzhou, use auction or bidding.

Over the nine months starting from the issue of the Ministry of Land and Resources national No 33 circular in 2002 relating to land to the similar Beijing government's No 4 circular in February this year, the amount of land sold through contract in Beijing equalled that of the land used for housing during the 10 years before the issue of the No 33 circular.

Therefore, land is being monopolized by group or individual real estate developers, enterprises sharing common interests with the governments, or those with special backgrounds.

The contract method destroys market-driven price mechanisms, making it possible for "unqualified" developers to easily buy great amounts of land and make very good profits.

Furthermore, some local governments, for the purpose of expanding local financial revenue, limit local land supply, thereby speeding up the imbalance between demand and supply.

With such a background, there are only a few developers who may enter the real estate market.
When demand exceeds supply in the market, developers are under no pressure.

However, as demand falls short of supply, there is fierce competition among developers, and house prices go down, not the result the developers expect or want.

As a result, motivated by keeping the prices of houses high and by making greater profits in the real estate market, the developers have colluded about house prices following a so-called leader-oriented rule.

That is, the developer who first entered into the market has the right to set the price, and successors can do nothing but follow it.

If anyone initiates a drop in price, the others combine forces to attack him.

Apart from that, as the developers always anticipate increasing housing prices, the consumers are misled and manipulated.

People even raise doubts about the quality of houses sold at lower prices.

The collusion on prices advances the monopolization of the real estate market, making it possible for real estate developers to profiteer and do harm to consumer interests.

Stir-frying effect

As a result of large-scale buying operations, housing prices in some areas are artificially inflated, which paves the way for developers to make handsome profits.

Obviously, real estate developers and Wenzhou purchasing groups mutually benefit.

In a recent survey of the Top 100 Richest in China, those engaged in the real estate industry make up more than 50 per cent, compared with only 6 per cent internationally.

What domestic developers and stir-frying speculators get comes from what the consumers lose.

As house prices are kept at a fixed high level, consumers with low or medium income suffer greatly.

Those with mortgages are loaded with the heavy burden of paying back a lot of money on time.
Most people, however, can hardly see any hope of buying their own houses.

Therefore, speculation speeds up the growth of the gap between rich and poor, arousing social disharmony and turbulence.

In such a monopolized real estate market, those who make the biggest profits are developers, especially those individuals or groups with special backgrounds, who first buy land from the government at a low price, and then sell them on higher.

The government stands next to the developers in terms of profit.

By selling land, the government increases domestic financial revenue.

Meanwhile, GDP together with tax have been fuelled by real estate industry development. Banks play a third role. As house prices flare, consumer welfare decreases.

Therefore, it is unreasonable to blame house-purchasing groups. They are not the problem and it is misleading for the public.

What is the essence of stir-frying?

First, stir-frying increases the disparity of wealth. A few speculators make huge amounts of money and most common people sustain great losses.

This runs counter to the human-oriented values of scientific development advocated by the central government of China.

Second, stir-frying can result in disastrous consequences.

Generally, capital used for house purchases is accumulated from domestic banks.

If something similar to the Asian financial crisis of 1997 recurs, house prices will fall.

The rich from Wenzhou will quickly turn to rags, and the speculators won't be able to pay back their loans. Then banks will have to shoulder an enormous burden.

In conclusion, we should not let the stir-frying continue.

The government should set restrictions on stir-frying so as to normalize the real estate market.
This would alleviate the symptoms.

Furthermore, the government should strengthen its supervision and issue regulations on land sales and prices as well. This is really the permanent cure.

Notes: The author is an economist with the Institute of Financial Research affiliated with the Chinese Academy of Social Sciences.

 
  Today's Top News     Top China News
 

Microsoft warns of 'important' Windows flaw

 

   
 

Price drop indicates economy cooling down

 

   
 

Premier: Taiwan legislation to be studied

 

   
 

US$1.5b in contracts signed in London

 

   
 

Olympic venues open to global bids

 

   
 

China's first frozen egg baby born

 

   
  Shanghai docs on the take may get axed
   
  Wen touts all-around exchange
   
  Incompetent officials face tougher scrutiny
   
  FM calls for `reasonable expectations'
   
  Police see latest cop high-tech gear
   
  Food security prime national priority
   
 
  Go to Another Section  
 
 
  Story Tools  
   
  Related Stories  
   
Housing leasing, sales remain active
   
Housing prices jump causes overheat worries
   
Shanghai's homes most costly
   
Tax plan to slash housing prices
   
Be it ever so expensive...
   
High prices hit homebuyers
   
Beijing cautioned to be on guard against real estate bubbles
  News Talk  
  When will china have direct elections?  
Advertisement
         
主站蜘蛛池模板: 国产高清精品一区 | 成人免费在线 | 亚洲免费视频网址 | 足恋玩丝袜脚视频免费网站 | 538在线视频二三区视视频 | 亚洲一区二区精品视频 | 国产成人亚洲合集青青草原精品 | 国产一级片儿 | 欧美 亚洲 另类 自拍 在线 | 九九综合视频 | 中国内地毛片免费高清 | 国产精品美女一区二区 | 欧美日韩高清不卡一区二区三区 | 欧美精品亚洲人成在线观看 | 亚洲高清不卡 | 国产普通话一二三道 | 亚洲国产精品大秀在线播放 | 日本欧美一区二区三区高清 | 免费看一级欧美毛片视频 | 大美女香蕉丽人视频网站 | 日本a级毛片免费观看 | 九九在线免费视频 | 久久毛片免费看 | 九九99久久精品国产 | 成在线人视频免费视频 | 国产午夜亚洲精品一区网站 | 狠色狠狠色狠狠狠色综合久久 | 伊人久久精品午夜 | 一本色道久久88加勒比—综合 | 曰本女同互慰高清在线观看 | 色老头oldmoneyvideos | 男女男免费视频网站国产 | 亚洲精品一区二区三区四 | 热99re久久精品这里都是免费 | 成人欧美一区在线视频在线观看 | 杨幂丝袜国产福利视频 | 欧美成人免费一区在线播放 | 一本久久道久久爱 | 亚洲精品人成在线观看 | 亚洲天堂二区 | 波多野结衣在线视频观看 |