Economy

Price suppression 'ineffective' in property market reform

(Xinhua)
Updated: 2010-11-03 09:58

BEIJING - Price fluctuation-oriented policies are doomed to fail in China's property market reform, said an expert with the research center of the State Council on Tuesday.

Hou Yunchun, vice-director of the Development Research Center of the State Council, told a forum on fiscal and financial policies that temporary suppression cannot solve the property market's problems.

Manufacturing continues to expand Related readings:  Cabinet keeps curbs on property market  Property tycoons suffer decline in their wealth  Corruption in real estate  Housing a basic right, says NPC

Hou said housing policy reforms, an increase in supply and guidance on reasonable demand are needed for the healthy development of the country's property market.

Li Daokui, a member of the monetary policy committee with the People's Bank of China (PBOC), said the government needs to drastically change its fiscal policies to solve a slew of problems including those concerning property market reforms.

Jia Kang, director of the Institute of Fiscal Science Research under the Ministry of Finance, said the government should guarantee 30 to 35 percent of its people have homes to live in and let the market decide housing prices for the rest.

In a statement issued on Oct 27, the State Council pledged to curb steep property-price rises in some cities and promote steady and healthy development of the property market for the rest of the year.