China Press Digest Oct 18: Property Tax, Land Sales, PBOC

The following lists highlights from Chinese press reports on Monday:

• China is likely to soon implement taxes on properties given the government's oft-repeated slogan that houses are not intended to be speculated on, and that China's efforts to lean on technology and manufacturing for growth, while waning off reliance on properties, Yicai.com reported citing Luo Zhiheng, deputy head of the Yuekai Securities Research Institute. The comments followed President Xi Jinping's recent article on "common prosperity," in which Xi urged more taxes on higher incomes. However, the government is likely to proceed with caution and will apply property taxes together with income taxes and adjust for regional differences, Yicai said citing Li Xuhong, a professor at Beijing National Accounting Institute.
• A Chinese local government faces difficulties paying basic social services as revenues from land sales plunged following this year's curbs on housing markets, the Economic Observer reported citing an interview with an unidentified local official. The county faces as much as CNY2 billion deficit as sales of land fell by more than half from last year, the newspaper reported citing the official. The county may have difficulty paying wages this month as the authorities scramble to borrow money from other sources, including using special-purpose bonds, the official was cited as saying. While the newspaper didn't say if other regions face similar difficulties, it cited a Moody's report saying that revenue from land sales accounted for 29.2% of total local government incomes in 2020. Local governments will increasingly rely on raising debt to pay their expenditures, the newspaper said.
• China will continue to implement proactive fiscal policy and prudent monetary policy to support recovery, PBOC Governor Yi Gang said at the meeting of the International Monetary and Finance Committee last week, according to a statement on the PBOC website. China's economy continues to recover with inflation generally moderate, while imports and exports are seeing robust growth, said Yi. The surplus of current account is at a reasonable range and the yuan remains stable, Yi said. China supports the transfer of SDRs to countries in need, expanding poverty reduction and growth trust, Yi said.