China should avoid excessively tight....>

CHINA PRESS: China should avoid excessively tight controls on the property

sector and make preparations to prevent large fluctuations in that market, Zhou

Shinian, assistant researcher of the economic forecast department at the State

Information Center, a government think tank under the National Development and

Reform Commission, wrote in an article published by China Securities Journal

Wednesday. The biggest worry is increasing pressure on property company

financing, which could intensify the risks to their debt repayment, Zhou said.

In addition, the rapid increase in the supply of land for affordable rental

housing and families could strengthen expectations that prices of houses sold by

developers will rise because the supply of land for such houses will decrease,

he said. Zhou stressed the need to diversify financing options for property

companies to include financial trusts, real estate investment trusts, investment

funds, and asset management plans. Zhou also called for facilitating a long-term

plan for management of the property sector, in particular calling for increasing

the cost of holding multiple properties by finally implementing the

long-discussed property tax on residential properties.