Housing prices top agenda at sessions
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Days after soaring property prices prompted Premier Wen Jiabao to vow to tame the "wild-horse" real estate market, housing issues rocketed up the agenda at the annual meeting of China's top advisory body, amid widespread public complaints.
Nearly 50 percent of proposals to this year's Chinese People's Political Consultative Conference (CPPCC) session are related to the housing sector, a key economic driving force that has fueled growing concern of a property bubble.
The proposals range from the construction of low-income housing to property taxes and controls on mortgage loans, as measures to rein in skyrocketing home prices, according to the China Securities newspaper.
The Third Session of the 11th CPPCC National Committee opened Wednesday afternoon in the Great Hall of the People in Beijing. Issues concerning people's daily lives, including the inequality of income distribution, food safety and education reform, are hot topics proposed by the CPPCC members, comprising representatives from various walks of life, such as academia, the arts, the entertainment world and religious groups.
The CPPCC members' proposals and debates, though not legally binding, are believed to be a democratic effort to push the government into taking action, boosted by their media coverage.
Other deputies from across the country will attend the annual session of the National People's Congress (NPC) tomorrow to convene on major national issues and discuss legally binding motions and laws.
CPPCC Chairman Jia Qinglin said in his report on the work of the CPPCC Wednesday that the CPPCC will focus on issues of common concern, including education, employment, housing and environmental protection, and give full attention to the excessive income gap that could affect social stability, as well as working hard to promote social fairness and justice.
Although a wide range of policies the government announced from the end of 2009 to the beginning of this year were in place with the aim of stabilizing the housing market, property prices showed no apparent signs of cooling and have become the top concern for many Chinese, who have long complained that runaway housing prices have soared beyond their affordability.
Housing prices surged 9.5 percent from a year earlier in January, the fastest pace of growth in 19 months, the Xinhua News Agency reported, attributing the rise to record bank lending of 9.6 trillion yuan and favorable tax breaks.
Yin Zhongqing, deputy director of the NPC Finance and Economic Affairs Committee, told the Beijing News one day before the CPPCC convened that the surge in house prices is a convincing indicator of a looming property bubble.
CPPCC member Pan Qingling told the China Securities Wednesday that housing prices in Beijing have surpassed those of Tokyo in accordance with residents' purchasing power.
The property-bubble burst in the 1990s in Japan triggered 20 years of slow economic growth, and China should bear that lesson in mind, Pan warned. Pan, who lived in Japan for more than two decades, said, "One million yuan (US$147,000) could buy a three-bedroom apartment in a rural area about a 20-minute drive from downtown Tokyo, but a similar apartment in suburban Beijing cannot be bought for the same amount of money."
Results of online public opinion polls on major Chinese news portals, including sina.com.cn and sohu.com, echoed the national advisers' concerns, pinning their hopes on the two annual conferences to address this urgent issue.
A majority of online users who participated Wednesday in a sina.com.cn poll – 52.3 percent of the more than 30,000 respondents – claimed they were most concerned about housing issues, while 13.9 percent of respondents said they cared about income distribution most.
On sohu.com, as many as 35 percent of 107,620 participants claimed housing prices and real estate market control would grab their attention the most, while nearly 20 percent said they would focus on the government's anti-corruption campaign and the oversight of officials.
In reaction to widespread complaints, Premier Wen Jiabao said last week during an online chat with Netizens that he was determined to tame the "wild-horse" housing market and keep property prices at a reasonable level during his term as premier.
The Chinese government will build 5 million affordable houses this year, after building 2 million in 2009, and 2 million shanty houses would be reconstructed this year, according to Wen.
Yin Bocheng, director of the Real Estate Research Center of Fudan University, told the Global Times that the key to tackling the problem of high property prices lies in whether local governments can implement the decisions made by the central government.
"If local governments could allocate between 60 and 70 percent of lands to develop low-rent and affordable apartments and 20 percent to commercial housing, property prices would drop immediately," he said, admitting both the central and local governments are caught in a dilemma as a result of government expenditure.
Local governments earned 1.59 trillion yuan from the sale of 209,000 hectares of land in 2009. Of that, 103,000 hectares were sold to developers, up 36.7 percent year on year.
Yin suggested reforming the current taxation system to allow local governments to collect more tax revenue so they could have more money to develop affordable housing and encourage the private sector to invest through incentive measures.
CPPCC member Mao Yonghong voiced a different option, however, noting that people should change their traditional mindset about purchasing property after they graduate from college or before they get married.
"There's no reason for those who cannot afford apartments to blame the government, society and developers. China has invested a lot to implement housing reform," he said in an interview with the Yangtze Evening Post.
