China raises scrutiny of property sector

BEIJING Wed Dec 22, 2010 6:25pm IST

Construction workers erect scaffolding on a new residential building in central Beijing, September 10, 2010. REUTERS/David Gray/Files

Construction workers erect scaffolding on a new residential building in central Beijing, September 10, 2010.

Credit: Reuters/David Gray/Files

Related Topics

Border Security Force (BSF) soldiers ride their camels as they rehearse for the "Beating the Retreat" ceremony in New Delhi January 27, 2015. REUTERS/Ahmad Masood

"Beating The Retreat" Rehearsals

Rehearsals are on for "Beating the Retreat" ceremony which symbolises retreat after a day on the battlefield, and marks the official end of the Republic Day celebrations.  Slideshow 

BEIJING (Reuters) - China will harden measures against speculation in its red-hot property market by intensifying scrutiny of foreign investment in the sector, according to a government website posting seen on Wednesday.

The Ministry of Commerce, which oversees foreign investment in China, said it would increase checks on property investment involving foreign currencies and ban foreign investors from betting on capital gains.

It did not elaborate on how the ban would be implemented. The statement was seen on the ministry's website (www.mofcom.gov.cn) for the first time and cited by several local news portals on Wednesday, but it was unclear why it was dated Nov 22.

Analysts said the remarks suggested the government was sharpening its rhetoric against hot money inflows into the property sector.

"The measures are the same as before, but the rhetoric is more serious," said Chen Dong, a property analyst at BOC International in Shanghai. "Still, it will be difficult to stop hot money inflows."

China's buoyant property markets have for months unsettled the government, which is worried frothy prices will fuel inflation and a housing bubble that will eventually burst with negative consequences for the wider economy.

The government stepped up its measures to cool property prices in late September by ordering home buyers to pay higher down payments and mortgage rates.

Officials have also tried to staunch speculative investment funds from flowing into the country, with the Chinese foreign exchange regulator stepping up checks on cross-border capital flows.

"This is a reinforcement of rules originally issued in 2007. Some authorities loosened the implementation during 2008 and 2009 amid the global financial crisis," said Wu Tao, chief executive officer of Wins Investment in Beijing.

He added the latest move was also part of China's efforts to rein in foreign investors who are betting on a stronger yuan.

Many Chinese cities have revived their restrictions on foreign property investment in recent months by banning foreigners from buying multiple units, and requiring them to stay in China for at least a year before making purchases.

(Reporting by Langi Chiang and Koh Gui Qing; Editing by Benjamin Kang Lim and Alex Richardson)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Reuters Showcase

Telecom Sector

Telecom Sector

India postpones mobile airwave auction to March 4.  Full Article 

Business Strategy

Business Strategy

Uber scraps commissions for its New Delhi taxis.  Full Article 

Currencies

Currencies

China's yuan breaks into the world's top five as payment currency - SWIFT.  Full Article 

India’s Male Tenor

India’s Male Tenor

India’s lone male tenor wants to ‘Indianise’ opera  Full Article 

Job Cuts

Job Cuts

Sony to cut 1,000 jobs in smartphone business - sources.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage