A seven-point directive issued by the central Government reflects its efforts to regain control over the real estate industry from local developers. Thousands of small property companies have been making huge profits by "chao di," or "stir-frying property" -- buying and reselling in a speculative frenzy. The document said the Government impose strict limits on the amount of land that can be leased for development and particularly crack down on the rush to build luxury villas, hotels, office buildings and country clubs. Some of those now being built are supposed to be converted into standard apartments, to ease the housing shortage, and into regular commercial buildings. The new measures also threaten to shut down real estate companies that "stir-fry property" without actually developing it. Fear of Inflation "The Government will sternly punish those who engage in speculative activities with the aim of making quick money rather than a long-term investment," the New China News Agency said Saturday night in announcing the crackdown. The new measures are part of a broad program that the nation's leadership has introduced to cool the economy. While Western governments may view economic overheating as preferable to the recession many of them now face, Chinese leaders are concerned that their boom is unsustainable and will result in spiraling inflation. The People's Daily announced on Thursday that the Government has closed 1,000 of the nation's 1,200 economic development zones. These zones were set up by local authorities to attract foreign and domestic investment, and they often offered tax breaks and special incentives that violated national policy. A few days ago, the Government also announced plans to transform of state-owned companies into limited-liability corporations
A seven-point directive issued by the central Government reflects its efforts to regain control over the real estate industry from local developers. Thousands of small property companies have been making huge profits by "chao di," or "stir-frying property" -- buying and reselling in a speculative frenzy. The document said the Government impose strict limits on the amount of land that can be leased for development and particularly crack down on the rush to build luxury villas, hotels, office buildings and country clubs. Some of those now being built are supposed to be converted into standard apartments, to ease the housing shortage, and into regular commercial buildings. The new measures also threaten to shut down real estate companies that "stir-fry property" without actually developing it. Fear of Inflation "The Government will sternly punish those who engage in speculative activities with the aim of making quick money rather than a long-term investment," the New China News Agency said Saturday night in announcing the crackdown. The new measures are part of a broad program that the nation's leadership has introduced to cool the economy. While Western governments may view economic overheating as preferable to the recession many of them now face, Chinese leaders are concerned that their boom is unsustainable and will result in spiraling inflation. The People's Daily announced on Thursday that the Government has closed 1,000 of the nation's 1,200 economic development zones. These zones were set up by local authorities to attract foreign and domestic investment, and they often offered tax breaks and special incentives that violated national policy. A few days ago, the Government also announced plans to transform of state-owned companies into limited-liability corporations
china_economy_in_1993-1999_2003_2004_2008_2012.docx