Policy reform for realty sector
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The country's ongoing adjustment of housing supply should be seen as an important step toward improving people's livelihood, and the supply of government-subsidized houses should be increased.
Compared with the proportion of government-subsidized houses in Singapore and Hong Kong, at 84 percent and 50 percent respectively, the Chinese mainland fares very poorly.
The authorities here should learn from Singapore's and Hong Kong's experiences as far as government-funded affordable houses are concerned.
At the same time, a set of sound systems should be institutionalized to regulate and monitor the sale and re-sale of these houses to prevent any malpractices and corruption in the process.
Effective measures should be taken to help extricate local governments from their long-standing dependence on land revenues.
To this end, the central government should adjust the current proportion of financial revenue distribution between itself and local governments in a way that will ensure that the latter have a sustainable revenue growth mechanism that is completely independent from past land revenue.
The current developer-dominated property model should be done away with and a multi-layer housing construction model set up in which not only developers but also the government and employing units can play their respective roles in home construction.
The long-prevailing unitary land supply system should be reformed and limitations should be introduced on land bids to ensure that lands targeted for the construction of people's self-inhabiting homes be sold at a reasonable price.
The country should step up its industrial restructuring and phase out the real estate sector from its list of national pillar industries.
Compared with information technology, bio-pharmacy and other hi-tech industries, the real estate sector has a lower technological content and thus plays a limited role in strengthening the country.
Given that its boom has been achieved at the expense of the country's resources and non-renewable land, the rapid development of the real estate industry will not last long.
As the world's third largest and to-be second largest economy, China should no longer peg its efforts to boost its national forces to a profiteering real estate industry.
In addition, a special government agency in charge of housing price regulation should be set up and new mechanisms to evaluate local governments' responsibilities and performances in the process should be incorporated.
The author is a professor at the School of Economics and Management under Shanghai-based Tongji University.
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