Xia Bin: Real estate adjustment to take 2-3 years
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The Chinese government will need two to three years to complete adjustments to the country's overheated real estate market, central bank advisor Xia Bin told the Summer Davos 2010 in Tianjin.
But Xia rejected suggestions in foreign media reports that the real estate bubble could precipitate a crisis in the economy as a whole.
"The government has recognized the problems and adopted measures to tackle them," Xia said, adding that gradual adjustments will solve the sector's problems.
Xia suggested China could learn from Germany's experience of regulating the real estate sector.
'Those who buy houses as investments rather than dwellings should be subject to high taxes,' Xia said.
Ma Jiantang, of China's National Bureau of Statistics (NBS), echoed Xia's view that government adjustments to the property market will have little impact on economic growth.
'There will be some impact, but not much,' said Ma. Investment in real estate accounts for only 20 percent of the country's total investment and the sector accounts for only a small proportion of GDP growth, he said.
China's overheated real estate market is a major concern for both the government and the public. House price growth continued to slow in August, with prices up 9.3 percent year-on-year. Month-on-month prices have remained unchanged since a 0.1 percent decline in June.
