A key advisor to the People’s Bank of China on Monday cited asset bubbles as "the real worry" for China’s economy and called on the government to manage them properly, the Dow Jones Newswires reported. Fan Gang, who sits on the PBoC’s monetary policy committee, said that the bank’s recent moves to curb excessive liquidity – the required reserve ratio has been increased, limiting the amount banks can lend – have been "very good, timely and necessary." He noted that a property tax would also help prevent the emergence of asset bubbles. China is considering the introduction of a property tax to replace one-off levies such as stamp duty and transaction taxes, but no date has been fixed. Property prices in 70 major cities rose at their fastest pace in 17 months in December. The PBoC has said that prices in tier-one cities have already exceeded the peak reached in the second half of 2007, while price in smaller cities are closing in on previous peaks.
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