CHINESE PREMIER Wen Jiabao has said the government will cool property prices, resist pressure for the yuan to appreciate and keep inflation at “reasonable” levels.
“Property prices have risen too quickly in some areas and we should use taxes and loan interest rates to stabilise” them, Mr Wen said at the weekend in an online interview with the official Xinhua News Agency.
China will “absolutely not yield” to calls for currency gains, he added.
China’s property prices climbed last month at the quickest pace since July 2008, adding to concern that record lending and inflows of money will inflate asset bubbles in the world’s fastest-growing major economy.
“It’s difficult to see how serious the government is about cooling the property market,” said Andy Xie, former Morgan Stanley chief Asian economist. “The issue isn’t about introducing new measures but enforcing existing measures.”
In November, real-estate prices in 70 major cities rose 5.7 per cent from a year earlier, compared with 3.9 per cent in October.
Mr Wen reiterated plans to build more low-cost housing and said the government would crack down on illegal activities, such as land hoarding, that drive up prices.
China should anticipate inflation because of factors including rising global commodity costs, Mr Wen said, pledging to keep price increases in a “reasonable range”.
Consumer prices climbed 0.6 per cent in November from a year earlier, snapping a nine-month run of deflation.
China raised its 2008 growth estimate to 9.6 per cent from 9 per cent at the weekend, narrowing the gap with Japan, the world’s second-biggest economy.
China is poised to overtake Japan next year, according to International Monetary Fund projections.
– (Bloomberg)
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