Changes in real estate market call for relevant policy change

The difficulties in the real estate market in China are visible reflections, if not a major source, of the mounting downward pressure on the Chinese economy. The debt crises of some giant housing companies are so serious, amounting to trillions of yuan, that they have the potential of snowballing into systemic risks for the whole economy.

National Bureau of Statistics spokesperson Fu Linghui's comments on that at a regular news conference in Beijing on Tuesday have caught everyone's attention. After all, how the policymakers view the situation can offer a glimpse of how they will tackle it.

Fu admitted that at present the real estate market is generally in an adjustment stage, and some real estate enterprises have encountered certain difficulties in operation, especially the debt risks of some leading real estate enterprises have been exposed, affecting market expectations. He also stressed that these problems are temporary. The market adjustment mechanism will gradually play its due role, along with relevant policy adjustments and optimization, and the risks are expected to be resolved in the future.

Real estate loans account for nearly 40 percent of bank loans. The real estate sector contributes to about 50 percent of local government revenue. Housing now accounts for about 60 percent of urban residents' assets. That shows how the sector is central to the health of the economy as a whole.

It is clear that on both the investment side and the consumption side, the real estate industry has experienced a significant "cooling" period. The change of the supply and demand relationship in the real estate market has actually opened a new window for the optimization of relevant regulatory policies. The focus of the policy should be changed from the original idea of "preventing overheating" to "avoiding freezing".

But it must be pointed out that the degree of the changes in the current real estate market should not be underestimated. The situation of the overall pressure on housing enterprises has not improved after several months, which is no longer a challenge the housing enterprises can resolve by themselves. It is thus necessary to give targeted policy support in many aspects such as rationalizing the market mechanism and improving financial policies to bail them out. And that should be carried out along with some other moves conducive to increasing people's incomes and creating jobs.

THEPAPER.CN