Control housing prices by reforms

Easing local governments' financial burden is the right way to curtail the governments' impulse to sell land, says an article of the 21st Century Business Herald. Excerpts:

With current land prices in Beijing, if the government sells all of its land now, its revenue this year will surpass the United States' GDP in 2012.

Housing prices in some big Chinese cities have increased so much that it's priced regular people out of the market.

The government is trying its best to transform the national economic structure and solve a lot of problems in the economic, industrial and social fields as fast as possible.

This is a competition. The bubble grants the government a period of time to carry out reforms while maintaining fast economic growth.

If the reforms are not successful, the bubble will soon bust.

Buying a house is a safe investment, as the hot money is very popular among people of all classes.

On the other side of the coin are local governments' embarrassing financial records. They deserve more tax revenue to pay their expenses in providing public services. But the central government has not decided to carry out tax distribution reforms until now.

Many officials take bribes while selling land to real estate developers. Farmers lose their land and take on the identity of an urban resident.

Original land prices are made higher and higher by the governments. All of the costs are transplanted to the last buyers of the houses before the bubble bursts.