The nation is strengthening its control of the land market,
which may hopefully bring an end to the many irregularities
cropping up in land deals.
Sources said, in order to regulate land use nationwide, the
central government is planning to centralize land transfer
approvals.
This is not only the latest step taken by the central
authorities to intervene more directly in land deals, but also the
most important measure taken so far.
Since the State Council released its "six measures" last month,
which aimed to rein in runaway house prices and standardize the
real estate market, ministries have responded with a slew of
policies.
Whether or not the Ministry of Land and Resources can control
wild land deals, which may encroach upon the country's precious
farmland and add fuel to the flames of an already red-hot housing
market, will have a significant impact on the success of this
central government policy.
The ministry has shown its muscle in terms of land controls over
the past month.
It has stopped land being used for the building of luxury
villas.
In addition, it has conducted nationwide investigations in a bid
to stop the many unlawful land acquisitions.
According to the ministry, many local governments are to blame
for these unbridled land deals. Prompted by huge profits from land
transfers, in which they requisition farmland before selling it to
developers at an inflated price, local governments have spared no
efforts to push land acquisitions, lawful or unlawful.
The ministry's surveys found that in some cities, a large
proportion up to 90 per cent in some cases of commercial land
acquisitions since September 2004 had been illegal.
In co-operation with other ministries, the ministry will also
recover land from developers if they fail to develop it within two
years of the acquisition.
Those measures are unprecedentedly harsh for developers, and are
an indication of the central government's determination to clean up
the real estate market.
It is obvious that these policies will not work without the
support of other policy packages, such as control of bank credit,
strengthening of taxation and the disclosure of market
information.
And it remains too early to predict the efficacy of those
policies, since history tells us that resistance from vested
interests sometimes results in the distortion of policies.
They, nevertheless, indicate the government's strong political
will to find a real solution to the real estate market's
problems.
We look forward to further efforts from the central government
to get these policies seriously implemented in a timely manner.
(China Daily June 21, 2006)
