 China's property price growth slows anew in August Beijing (AFP) Sept 10, 2010 - Growth in China's property prices slowed for the fourth straight month in August, data showed Friday, suggesting that government efforts to pop a feared speculative bubble are paying off. Housing prices in 70 major cities rose 9.3 percent year-on-year in August, the National Bureau of Statistics said, down from 10.3 percent in July. The slower growth came after Beijing imposed a range of measures to prevent the real-estate sector overheating and causing a bubble that analysts say could derail the economy. Prices had surged 12.8 percent in April, the biggest on-year rise for a single month since July 2005, when the survey was widened to 70 cities from 35. On a monthly basis, property prices were unchanged last month from July, the statistics bureau said. Total floor space -- commercial and residential -- sold last month fell 10.1 percent year-on-year to 68.86 million square metres (741 million square feet), the data showed. The value of sales also fell 8.6 percent from the same period last year to 353.3 billion yuan (52.2 billion dollars), adding to mounting evidence that the government's anti-speculation measures are working. Authorities this year have tightened restrictions nationwide on advance sales of new developments, introduced curbs on loans for third home purchases and raised minimum down-payments for second homes. The government said in July it had no plans to ease the restrictions and would continue to "firmly crack down on speculative purchases of houses". The State Council, or cabinet, said in May it would "progressively push forward the reform of the property tax", which is widely expected to entail an expansion of the tax on commercial real estate to cover residential houses. Owing to fears of a US-style bubble, regulators have asked Chinese banks to test the possible impact of a 30-percent plunge in property prices on the quality of their loan books. |
The figures came as US data showed America's trade deficit with China fell in July -- which could erode arguments by US lawmakers that Beijing's yuan exchange rate policy is giving Chinese exporters an unfair trade advantage.
Stocks across Asia were mixed on the news, which dampened positive sentiment built up by upbeat US jobs data and an upward revision of Japan's growth. In Shanghai, the benchmark index recovered early losses to close up 0.26 percent.
Separate figures suggested Beijing's attempts to rein in the nation's red-hot property market had started to work as the rise in house prices eased slightly last month.
Analysts predicted China's trade surplus would widen to around 30 billion dollars in August, which would have been the highest since January 2009, but it instead fell to 20.03 billion dollars from July's 28.7 billion dollars.
China's exports in August totalled 139.3 billion dollars, growing 34.4 percent year on year but slower than July, when they rose 38.1 percent to a monthly record of 145.52 billion dollars.
Imports meanwhile picked up in August, growing a larger-than-expected 35.2 percent to 119.27 billion dollars, suggesting the slowdown in the Chinese economy is not as severe as feared. Analysts had tipped a 25 percent rise.
China this week vowed to make it easier to import goods as Beijing seeks to address controversial trade surpluses with its key partners, particularly the United States.
Royal Bank of Scotland economist Ben Simpfendorfer said the exports slowdown would bolster Beijing's arguments for a limited increase in the yuan against the dollar.
"They will certainly see this as a reason to continue with the current currency policy -- very limited appreciation," Simpfendorfer told AFP.
Beijing-based IHS Global Insight economist Ren Xianfang added: "It does give Beijing some support to its case for a slow revaluation of the currency."
China pledged in June to loosen its grip on the yuan and allow it to trade more freely against the dollar, following intense pressure from the United States, Europe and other trading partners for a stronger currency.
Since then the yuan has appreciated less than one percent against the greenback, angering US lawmakers who have been calling for steps against what they see as unfair Chinese trade practices.
Some economists think the yuan is undervalued by 25-40 percent, giving Chinese exporters an unfair price advantage -- but Beijing has called the allegations "groundless".
US lawmakers have been pressing for legislation that would require the Commerce Department to apply punitive sanctions against China and other countries with allegedly undervalued currencies.
Treasury Secretary Timothy Geithner next week will face questions from a key US House committee on possible new steps to press China over its currency policy, the panel's chairman said Thursday.
The US trade deficit with China fell to 25.92 billion dollars in July from 26.15 billion dollars in June, which analysts said could weaken claims Beijing's yuan regime is sending a flood of cheap Chinese goods into the US.
Royal Bank of Canada senior strategist Brian Jackson said the Chinese data "showed impressive resilience" despite sluggish growth in the United States and financial woes in Europe.
"This suggests that the slowdown in Chinese growth ... has not been caused by external factors but, instead, has been made in Beijing," Jackson said, referring to government efforts to curb property prices and bank lending.
These tightening measures are starting to work, as evidenced by the continued slowdown in property prices last month.
House prices in 70 major cities rose 9.3 percent year-on-year in August, the National Bureau of Statistics said Friday, from 10.3 percent in July.
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