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Apr-28-2008China property market won't turn bearish in '08: report(topic overview)
CONTENTS:
- BEIJING (XFN-ASIA) - The pace of property price growth in 2008 is expected to slow, the official Xinhua news agency reported, citing the Chinese Academy of Social Sciences (CASS). (More...)
- CASS said that the agriculture sector's value added is seen rising 3.2 pct, with value added for the industrial and the service industries seen at 12.2 pct and 10.9 pct respectively. (More...)
- Annual per capita disposable income in urban areas is seen growing 11.1 pct, while income in rural areas is seen rising 7.3 pct. (More...)
- The annual per capita disposable income in urban areas would gain 11.1 percent, and that in rural areas would increase by 7.3 percent. (More...)
- CASS said the government also needed to curb the hoarding of land by developers, raise the downpayment requirement for second homes, which is currently 40 percent, and start to levy a general property tax. (More...)
- The total retail sales of consumer goods would for the first time rose above 10 trillion to 10.46 trillion yuan, and continue to be a major factor behind national economic growth, said the report. (More...)
- China has about 9% of the world's arable land and imports about 7% of its grains and oilseeds requirements. (More...)
SOURCES
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BEIJING (XFN-ASIA) - The pace of property price growth in 2008 is expected to slow, the official Xinhua news agency reported, citing the Chinese Academy of Social Sciences (CASS). CASS said in its annual report on the property sector that it expects the nationwide rise in real-estate prices in 2008 to be 'far below' that of last year, Xinhua reported. [1] BEIJING, April 27 (Xinhua) -- Chinese Academy of Social Sciences (CASS) predicted a 10.7 percent growth in the country's gross domestic product (GDP) in 2008, though it said the speed would be slower compared with the previous year.[2]
BEIJING (XFN-ASIA) - China's economy is expected to grow 10.7 pct in 2008, slowing from 11.9 pct in 2007, the official Xinhua news agency reported, citing the Chinese Academy of Social Sciences (CASS).[3]
The Chinese Academy of Social Sciences estimates that the cost of transportation and distribution represents about 18% of the retail price of goods in China. This being the case, transport costs can be prohibitive for some lower-valued commodities and these costs impede the ability of Chinese farmers in the interior to compete for the food dollars being spent in coastal cities and other Asian markets.[4]
The Chinese Academy of Social Sciences (CASS) said that it was still premature to draw the conclusion that the market was heading south.[5]
CASS said that the agriculture sector's value added is seen rising 3.2 pct, with value added for the industrial and the service industries seen at 12.2 pct and 10.9 pct respectively. Fixed-asset investment is seen at 17.03 trln yuan this year, up 19.1 pct, still significantly higher than growth in GDP and the consumer price index (CPI). [3] The fixed assets investment would hit 17.03 trillion yuan (about 2.43 trillion U.S. dollars), up 19.1 percent year-on-year, still significantly higher than the growth of GDP and consumer price index (CPI), said the report on China's economic situation in 2008.[2]
Import and export growth would slow down to 23.3 percent and 19 percent because of the uncertainties in international economy, and the trade surplus would be 270 billion U.S. dollars, said the report. China posted a GDP growth of 11.9 percent in 2007, according to the results of preliminary verification announced by the National Bureau of Statistics early this month.[2] Import and export growth is expected to slow to 23.3 pct and 19 pct respectively due to uncertainty in the international economy, with a trade surplus seen at 270 bln usd.[3]
China has eliminated export tax rebates on grains, soybeans and flour products, some as high as 13%, and imposed export taxes ranging from 5 to 25% on wheat, corn, rice and soybeans. This has resulted in a significant reduction in exports of most grains and oilseeds, but overall dependency on imports continues as shown by rapid growth in imports of soybeans from the U.S. and Brazil.[4] Specifically, the growth in domestic consumption of higher-value frozen and perishable products continues to strain China's transport and distribution system.[4]
Annual per capita disposable income in urban areas is seen growing 11.1 pct, while income in rural areas is seen rising 7.3 pct. Both urban and rural income growth are expected to be lower than the 2007 rate. Retail sales of consumer goods are expected to surpass 10 trln yuan for the first time this year to 10.46 trln, and continue as the main driver of economic growth, CASS said. [3] Price strength is expected to decline in the second half of 2008 as government intervention starts to make itself felt, although growth in the annual commodity retail price index and the CPI are still seen at around 4.4 pct and 5.5 pct, CASS said.[3]
The high-flying prices would decline in latter half as the government policies start to pay off, but the annual commodity retail price index and the CPI would still be around 4.4 percent and 5.5 percent, the report said.[2]
The annual per capita disposable income in urban areas would gain 11.1 percent, and that in rural areas would increase by 7.3 percent. Both the urban and rural income growth would be lower than 2007, the report said. [2] As for annual per-capita disposable income, the academy predicted a gain of 11.1 percent in urban areas and a 7.3 percent bump in rural areas.[6]
Although there is a steady population shift toward urban centers, the majority of China's population still lives in rural areas and depends heavily on the many labor-intensive, small-scale farms, which average 0.65 hectares in size. Due to the surplus of labor, China has a comparative advantage in the production of fruit and vegetables, a sector which continues to grow, but they are less competitive in the production of land-intensive crops such as grains and oilseeds. Nevertheless, the Chinese government pursues policies that encourage increased grain production at the expense of more profitable crops such as fruit and vegetables.[4] Xinhua reported Sunday that the government group also said the value of China's agricultural sector would increase by 3.2 percent, while the industrial and the service sectors would jump up 12.2 percent and 10.9 percent respectively.[6] The state-run Chinese news service also reported China's fixed assets investment would reach $2.43 trillion, up 19.1 percent year-on-year.[6]
China's urbanization and residents' desire for better housing, compounded by the scarcity of land and the government's tightened grip on land supply to curb investment, would put continued pressure on prices in the long run, it said. The National Development and Reform Commission, China's top economic planner, also said recently that upward pressure on property prices would increase in the second quarter as more people put their money in property to avoid the erosion of returns faced by bank deposits.[5] CASS said that inflows of speculative capital from overseas would increase during the remainder of the first half of the year, as investors sought shelter from global economic turbulence and bet on continuing appreciation of the yuan. To brake increases in property prices, Beijing would continue its tightening campaign, including by curbing land supply and loan growth and giving further policy incentives aimed at increasing the supply of more affordable housing, it said.[5] Property prices rose 10.7 pct year-on-year in March, compared with 10.9 pct growth in February, the NDRC said earlier.[1]
Property prices in 70 of China's large and medium-sized cities rose 10.5 pct at the end of December from a year earlier, according to data from the National Bureau of Statistics.[1]
Urban property prices rose less rapidly in March than in the first two months, and the property outlook index, which covers price and investment trends, continued to decline in March after peaking in November.[5]
CASS said the government also needed to curb the hoarding of land by developers, raise the downpayment requirement for second homes, which is currently 40 percent, and start to levy a general property tax. [5] The added value of the agricultural sector would increase by 3.2 percent, and that of the industrial and the service industries would be 12.2 percent and 10.9 percent respectively, according to a report released by CASS.[2] Although China's transportation and distribution system at coastal locations is reasonably well developed, improvements in China's transportation and distribution infrastructure elsewhere have not kept pace with the increase in demand for specialized services that are required to get some food products to market.[4] Up to one-third of perishable products spoil due to inadequate temperature-controlled storage and transport services. Until a logistics infrastructure is developed to accommodate these food products which are shipped from the interior to coastal regions, some of the demand for higher-value frozen and perishable products will likely continue to be met with imports from neighbouring countries.[4]
The total retail sales of consumer goods would for the first time rose above 10 trillion to 10.46 trillion yuan, and continue to be a major factor behind national economic growth, said the report. [2] BEIJING (Reuters) - China's real estate market will not see a major slowdown in 2008 despite Beijing's intensified efforts to cool excessive price rises, the top government think-tank said in a report published on Monday.[5] Government policies to cool the property market are beginning to have an effect, and are 'gradually restoring rationality to real-estate demand,' the report said. China will further strengthen controls on real estate this year, the report said.[1]
China has about 9% of the world's arable land and imports about 7% of its grains and oilseeds requirements. Its agricultural sector contributes about 13% to the GDP and provides a livelihood for about 200 million households. [4] In the face of rising food prices, China has established policies to discourage food exports and to facilitate imports.[4]
SOURCES
1. China 2008 property price growth to slow significantly - Xinhua - Forbes.com
2. Report: Chinese economy to maintain 10% growth despite slowdown in 2008_English_Xinhua
3. China 2008 GDP growth seen slowing to 10.7 pct - CASS - Forbes.com
4. China Agriculture: 9% Of World's Arable Land, Transportation & Distribution
5. China property market won't turn bearish in '08: report | U.S. | Reuters
6. China expects 10.7 percent GDP growth - UPI.com
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