Chinese business & economic reforms
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China’s major cities have banned the sale of land after a new government law failed to raise prices, in a bid to revive President Xi Jinping’s campaign to reduce social inequality.
The legislation was developed as part of Xi’s efforts to promote “ordinary glory”In the fight against high-cost trees carried by middle-aged families, the aim is to reduce the cost of runaway homes and homes. But he had a different conspiracy, sending to raise prices for retailers.
Legislation unveiled by the ministry of environment in February said 22 cities, including Beijing and Shanghai, should sell more land this year than it sold almost between 2016 and 2020. Towns are expected to reduce the area to three major markets in 2021.
Officials feel that the city’s former marketing efforts to market the mass market have attracted the attention of its developers. Manufacturers who missed out on a single market may start the next round, officials argued, resulting in more profitable finances and ultimately a larger house. prices.
Ren Yi, a well-known Chinese blogger who uses the name of Chairman Rabbit, has noted that the government is deeply concerned about “the economic crisis and the rise in high housing prices”.
Reducing this approach in the three markets, the ministry said, in line with the Financial Times’ view, could create a “massive presence” in each market and allow the tire market to heat up more “back to normal”. These changes can also make it harder for developers to earn enough to buy multiple packages, adding a memo.
But it did not go as planned, and the markets for July and August were closed. Government advisers have warned that what developers will not change unless their annual inventory is increased.
“Weapons are in short supply,” said a consultant to the environment ministry, who asked not to be named. “The organizers of the competition have competed in any field available.
“The authorities had high hopes. They did not expect the market to run counter to their demands. ”
In the 22 cities planning to sell the property, the sale price increased by Rmb9,591 ($ 1,485) per sq m in the first half of the year, 38.3% has increased since last year, according to local council figures. .
The first market took place from April to June. In Chongqing, the country’s largest and most populous city, smaller than China Merchants Group, a bank, paid 130% above in asking for a town rate. The increase he paid in the city last year was 49 percent.
A Chinese Merchants official who asked not to be named said the group wants to donate more money because “we are in a competition to burn money to build our facility”.
Some cities began to impose a limit on prices, which were determined by the lottery because many manufacturers were willing to pay the highest price allowed.
In April, requests for a township in Guangzhou were met at 50% of the asking price. To increase their chances of success, the big manufacturers have created several shell companies to give them extra tickets on the artwork. About 300 organizations participated in the market, but represent only 30 manufacturers.
Local state-owned companies also participated. “There is no way you can do business without a dozen – or more – shell companies to compete,” said officials at Yuexiu Enterprises, a program developer overseen by the Guangzhou government.
At an internal meeting last month, the Ministry of Environment tried to curb the number of patent companies by saying everyone should provide financial proof, according to the minutes of the meeting held by FT. It also advised local governments to limit their limits by 15% over asking for a price.
The ministry’s adviser doubted the effectiveness of the new measures. The way local governments receive most of their revenue by selling land, can be tempered to simply increase the cost of application.
“There is a lot that is at stake,” he said. “The federal government cannot expect to be in control of anything.”