Economic growth should not be overly dependent on the property sector, warns a report from the Chinese Academy of Social Science (CASS).
The report followed the CASS’s investigation into the US subprime mortgage crisis in June. It suggested the government should rethink the development of the real estate sector, and clarify their role in the market.
Local governments used to bank on the real estate sector for economic growth and land transfer fees were regarded as the main source of local fiscal income.
Statistics from the National Bureau of Statistics show that investment in the real estate sector last year reached RMB2.53 trillion yuan ($370.13 billion), contributing 10.25% to the country’s GDP.
The report suggested that the government reform the housing fund management system and establish housing mortgage banks and companies dealing in securities to back housing mortgages.
Source: China Daily