Sat, Jan 01, 2011 - Page 10 News List

China cracks down on land hoarding

BUBBLE TROUBLE:The measure is one of a series of new moves aimed at curbing the country’s soaring property prices, which are now 7.7% higher than a year ago

AFP, BEIJING

China has ordered local officials to fine property developers who have left land vacant for more than one year as Beijing cracks down on hoarding that has been blamed for driving up real estate prices.

The country’s land and resources ministry on Thursday published a list of 26 cases of land left undeveloped and the names of the property developers involved, with strict orders for authorities to punish the offenders.

Real estate developers who have left land vacant for one to two years should be fined, while property left undeveloped for more than two years should be returned to the government, the statement said.

Listed real estate developers will be banned from participating in auctions until they make use of the land they already own, the ministry said.

Earlier this month, Beijing ordered local governments to curb rapid rises in land prices and pledged to crack down on corrupt developers looking to cash in on the market boom.

In November, prices in 70 major cities were up 0.3 percent from October — their third straight month-on-month rise — and were 7.7 percent higher than a year ago, official data showed.

Property prices have been fueled by low interest rates and rampant bank lending, which reached 7.45 trillion yuan (US$1.1 trillion) for the first 11 months of the year, just shy of the government’s full-year target of 7.5 trillion yuan.

Beijing has tried to keep a lid on prices through a range of measures such as hiking minimum down--payments on all property transactions to at least 30 percent and raising interest rates twice in less than three months.

Authorities have also ordered banks to increase the amount of money they must keep in reserve — effectively limiting the amount of money they can lend — six times this year.

Separately, China has ordered major state-owned companies to divert more of their profits to the central government, giving Beijing more money to spend on priorities such as education, healthcare and the military.

The finance ministry announced the increase in dividend payments on Thursday as Beijing seeks to improve social services and boost domestic consumption in order to reduce the country’s heavy reliance on exports to drive growth.

It is also seeking to narrow the country’s widening wealth gap.

Starting next year, companies mainly in the tobacco, energy and telecoms industries will have to pay 15 percent of their after-tax profits to the central government, up from 10 percent currently, the finance ministry said.

Companies in the next group, mainly in the steel, transport and construction sectors, will see their dividend payout ratios increase to 10 percent from five percent, the statement said.

The smallest dividends will be paid by companies mainly in the weapons and heavy machinery sectors. They will have to turn over 5 percent of their profits, it said.

The increase has been approved by the State Council, or Cabinet.

China resumed collecting dividends from state-owned companies in 2007 after suspending payments in the 1990s during massive restructuring and mass layoffs in the sector.

Beijing collected 157.22 billion yuan in dividends from 2007 to 2009, state media reports said previously.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top