Property market reform
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The reform of China's property market marks the initiation of structural adjustments to its economic system, says an article in Youth Times. Excerpts:
Immediately after the release of new policies in China's real estate market, securities markets saw sharp slides, with the benchmark Shanghai Composite Index falling nearly 5 percent to less than 3,000. Also, it was expected to cause a panic withdrawal of property investors.
Deficiencies in the property market symbolize disorders in China's economic structure at large, featured by the poor public revenue and tax systems and the unbalanced income distribution.
Now that the central government resolves to abolish perennial maladies in the realty market, it should carry the reform through to the end, despite the pressures of increasing inflation and rising resource prices.
To carry out the new property policies, it is necessary to intensify the tax reform, focusing on taxes on consumption and real estate possession.
Correspondingly, financial reforms are needed in bank regulations, as well. China will witness internal economic adjustments at the structural level, avoiding significant changes in exchange or interest rates.
