Rules expected to fight 'hot money'
By Zhang Jin and Hui Ching-hoo (China Daily)
Updated: 2006-07-11 08:43
In a drive to prevent "hot money" flowing into China, the government is
likely to issue a set of measures "within days" to check overseas investors'
purchases of mainland property.
"The measures will come this week,
probably at the end of the week," a source familiar with the situation told
China Daily.
Another source, who has wide connections in Beijing's
property market, also expected the regulations to be issued imminently, unless
favourable figures are released, showing recent measures aimed at cooling the
property market are driving "hot money" out.
Government sources were not
available for comment last night.
The rules, to be issued by the State
Administration of Foreign Exchange and other ministries, seem necessary after
the mainland registered a 31.3 per cent growth in fixed-asset investments
between January and May. Property made up the bulk of the growth.
The
move would follow a raft of cool-down measures issued by the government in
May.
The measures included an increase in the down-payment ratio and a
tightening of credit rules to slow down rampant investment in the high-end
property market and boost the supply of low-cost houses.
"This round of
tightening policies are tougher than last year's," said Liao Qun, an economist
with Hong Kong's CITIC Ka Wah Bank.
"And more austerity measures are on
the cards if the situation does not improve," he added, stressing his comments
did not refer to a check on international funds.
However, the mainland's
senior officials recently said rules to check international funds flowing into
China's property market are being discussed and drafted.
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