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China rules on property prices
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Page last updated at 04:17 GMT, Monday, 11 January 2010
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China orders low-cost housing against property bubble

By Chris Hogg
BBC News, Shanghai

A Chinese woman walks past a property sales office at the Central Business District in Beijing
The Chinese government is offering incentives to homebuyers

China's city governments and ministries have been told to build more low cost housing.

They have also been ordered to push property developers to complete projects more quickly in order to help ease property prices.

The directive has come from the country's cabinet, the State Council, amid fears of a property bubble.

It also says it wants to prevent speculative foreign investment pushing up prices even further.

China's leaders are worried that house prices in many cities here are rising too fast now.

Hot money

If too many Chinese are priced out of the market, it could stir economic and social instability.

Last year China's banks issued $1.5 trillion (£932 bn) worth of new loans to help ease the country through the financial crisis.

It is thought around a sixth of the total flowed into the property sector and there are some here who worry it is now overheating.

The new directive from the State Council sets out measures to try to increase the supply of smaller, cheaper homes for families on low incomes.

It also urges financial institutions to promote measures that encourage first time buyers but discourage those who want to purchase a second home for investment purposes.

It says there should be a crackdown on property developers who hoard land to try raise prices in an area.

And it wants to stop so called "hot money" from flowing into the country.

This is cash from foreign investors who see the rising prices here as an opportunity to make money.



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GLOBAL ECONOMY
LATEST NEWS
IMF head speaks out on Greek fear
Greece calls on emergency loans
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BACKGROUND AND ANALYSIS
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Recovery is expected in 2010, the OECD says.
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Quicklinks:
- IMF head speaks out on Greek fear- Greece calls on emergency loans- UK economic growth slows to 0.2%- Greek deficit worse than thought- Russia raises $5.5bn on markets- Global recovery faster, says IMF- Indian central bank raises rates- 8367983- Global growth- Recovery is expected in 2010, the OECD says. - Asia 'leading world out of slump'- G20 vows to spur fragile growth- Mixed response to transaction tax- 8214272- G20 map- Stimuli and deficits: Who has spent the most? - How the financial crisis unfolded- 8695914- Dubai World agrees debt deal- 8695914- 8695150- Exports boost Japan's recovery- 8695150- 8689937- Food prices driving Indian inflation- 8689937- 8690770- EU to toughen up hedge fund rules- 8690770- 8681909- US shoppers 'becoming more confident'- 8681909- 8681674- Portugal agree extra austerity measures- 8681674- 8681834- Russian trade hit by corruption- 8681834- 8681897- Challenges facing Spain's Iberia- 8681897- Why are fountain pen sales rising?- Why readers love their moustaches- Tenancingo: the town sex trafficking built- Shaming the men who pay for sex- 17390729- Ghost town- 18021714- Naked truth- Chinese fakes 'used in US planes'- Trafficked: Sex slaves seduced and sold- Trafficked: Sex slaves seduced and sold- Ultra-orthodox Jews rally over web fears- Man survives fall into Niagara Falls- 'Brothels on wheels' in New York City- Why are fountain pen sales rising?- Why readers love their moustaches- Tenancingo: the town sex trafficking built- Shaming the men who pay for sex- 17390729- Ghost town- 18021714- Naked truth