China's Cabinet took aggressive steps yesterday to cool off one of the hottest parts in the red-hot economy, ordering measures to restrain soaring housing prices and discourage real estate speculation.
The new measures by the State Council included tighter lending standards and higher minimum down payments. They came only a week after banks were told to favor families buying their first homes and to cut back on lending to investors in expensive luxury villas and apartments.
The latest steps were taken to "promote the healthy development of the real estate market," the State Council said in an announcement carried by the official Xinhua news agency.
China's leadership has periodically tried to rein in the economy, which has galloped along at about 10 percent growth for each of the past three years. Last month, the government called for renewed efforts as investment in housing, factories and other fixed assets rose, prompting fears that banks were lending carelessly and could end up with bad debts.
Housing prices have been a particular concern because their rapid climb is touching off resentment among working-class Chinese and widening a politically volatile gulf between China's rich and poor.
The government says housing prices rose by an average of 5.5 percent in the first three months of this year, compared with the same period last year. But in areas increases are much greater.
Under the latest measures, developers are required to charge down payments of at least 30 percent, up from the previous minimum of 20 percent, according to the announcement.
It said low-income families can still qualify for the 20 percent level for properties smaller than 90m2.
In addition, developers will now be required to supply a minimum of 35 percent of the capital for new properties, the announcement said, without giving the earlier level.
Owners who sell a property less than five years after purchasing it will have to pay tax on their proceeds, up from a previous two-year limit, Xinhua said.
It didn't say how the tax would be calculated.
Real estate has been one of the most visible signs of China's growing wealth gap.
The government is eager to encourage private home ownership.
But the surge in construction has fueled social strains as farmers and factory workers are evicted to make way for luxury apartments and walled villa compounds for an elite and small middle class who have benefited from two decades of capitalist-style economic reforms.
Thousands of protests, some of them violent, have been reported in areas throughout China over complaints that displaced villagers receive little or no compensation for seized land.
Chinese banks reported total outstanding loans of 20.6 trillion yuan (US$2.6 trillion) as of the end of March, up 14.7 percent from the same time last year, the government newspaper China Daily said last week, citing official figures.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) investment project in Arizona has progressed better than expected, but it still faces challenges such as water and labor shortages, National Development Council (NDC) Minister Yeh Chun-hsien (葉俊顯) said yesterday. Speaking with reporters after visiting TSMC’s Arizona hub and attending the SelectUSA Investment Summit in Maryland last week, Yeh said TSMC’s Arizona site turned a profit of NT$16.14 billion (US$514 million) last year in its first full year of mass production. “TSMC told me it was surprised by the smooth trial run of the first fab, which has left the company optimistic about the project’s outlook,”
RSS