MNI EXCLUSIVE: Hainan Property Curbs Warning Policy Continues

--Property Expert Warns Latest Hainan Moves Underline Government Concerns

By Iris Ouyang

     LONDON (MNI) - China continues to try and further rein in a surge in

housing prices in Hainan province, such policies should be seen as a warning

that they could be extended to other parts of the country, a leading China

property expert has told MNI.

     "Property policy tightening (this time in Hainan) serves as a warning

signal to the whole property market," Cui Ji, manager of the comprehensive

research centre at the E-house Real Estate Research Institute, said in exclusive

comments to MNI. 

     "The central government stressed risk controls this year, so policies have

tightened for places where property prices rose quickly," she added.

     --POSTER CHILD

     Hainan Province, a 'poster child' for China's economic global awakening,

becomes the latest region to show a reduced economic reliance on property market

growth. 

     China's southern-most island saw tighter property controls put in place

Sunday, as home purchase quotas in several districts were extended to the entire

province.

     MNI reported earlier this month that prices in Haikou, capital city of

Hainan Province, grew 2.1% m/m, the fastest pace across China in the 70 medium-

to large-sized Chinese cities the National Bureau of Statistics monitors.

     Most analysts believe the measures are aimed at clamping down on

speculation and rising investment into the free-trade zone as China uses it as a

test area for preferential policies. 

     --CURBS TO HELP GROWTH

     President Xi Jinping announced in mid-April that China would make Hainan a

free-trade port to mark the province's 30th anniversary of becoming a Special

Economic Zone.

     At a wider scope, the new property policies indicate China's government is

sticking to its stance to rein in a further house price surge, with the goal of

curbing the property bubble which could increase the overall financial risks in

the world's second largest economy.

     As China continues to guide its property market to long-term sustainable

growth, property controls are still seen as essential for curbing related risks,

and the central government is expected to increase curbs on cities where

property market is heating up, E-House's Cui added.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

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