China Can Boost Growth as It Cools Property, Merrill Says
Chinese policies announced yesterday to reduce property-price increases should aid economic growth because the government will boost the supply of homes rather than limit investment, Bank of America-Merrill Lynch said.
The government “plans to control property prices by accelerating property investment and increasing supply,” economists Lu Ting and T.J. Bond said in an e-mailed note today. That contrasts with efforts in 2006 to cool prices by controlling investment, the economists said.
The State Council said yesterday that China would target “excessive” increases in property prices in some cities, using measures including the swifter construction of low-cost housing. Real-estate prices across 70 cities rose in November at the fastest pace since July 2008, fueling concern that asset bubbles may inflate in the world’s third-biggest economy guaranteed payday loan.
China’s economy accelerated to 8.9 percent growth in the third quarter from a year earlier because of record lending and the government’s 4 trillion yuan ($586 billion) stimulus package. In November, property prices climbed 5.7 percent from a year earlier.
The latest measures “should be positive to economic growth,” the economists said, adding that they expect China’s economy to grow 10.1 percent next year.
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