The Chinese government does not intend to play with fire. No property bubble and certainly no stock market meltdown can come its way if they stay ever vigilant.And so it came to pass. Before the 'shove' phase can come on, they capped it at the 'push phase'.China renewed its vow to curb runaway property price rises by increasing the supply of affordable housing and cracking down on housing speculation.
First, China's central bank raised bank reserve requirements [for the first time since a cut in December 2008], signalling that the days of cheap money are numbered.
They warned of excessive borrowing among land developers and indicated that property prices in the country's rich coastal cities are too high, stressing that the government remains focused on preventing further asset price inflation.
In a joint statement, officials at the Ministry of Finance, Ministry of Land and Resources, the central bank, the banking regulator and others said they would continue to increase the supply of land and affordable housing, and set up checks on the property investments of state-owned enterprises.
"Since the second half of 2009, some cities have witnessed fast property price rises and inefficient supply of housing," the statement said.
The State Council, China's cabinet, on Sunday warned of the negative impact of letting hot money flow into domestic real estate markets and inflating prices further.
The Housing Ministry has also called for stricter rules on giving mortgages to second-home buyers and is discussing eliminating discount financing for buyers who already own one home.
Such a gung-ho approach. Don't they mean business?
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