China pol­icy moves risk prop­erty price bub­ble: PBOC Ad­viser

The Pak Banker - - COM­PA­NIES/BOSS -

BEI­JING: China's mon­e­tary poli­cies have en­cour­aged in­vestors to pour money into real es­tate, in­flat­ing prices in cities such as Bei­jing, Shang­hai and Shen­zhen and in­creas­ing the risk that bub­bles could form, cen­tral bank pol­icy ad­viser Bai Chon­gen said in an in­ter­view. At the same time, smaller prop­erty mar­kets are strug­gling with ex­cess in­ven­tory, mak­ing it dif­fi­cult to craft a uni­fied pol­icy re­sponse and re­quir­ing care­ful co­or­di­na­tion with fis­cal mea­sures, he said Wed­nes­day on the side­lines of a joint sym­po­sium hosted by the Peo­ple's Bank of China and the Fed­eral Re­serve Bank of New York in Hangzhou. "I can't say whether there are bub­bles right now, but we're wor­ried about such a prob­lem," said Bai, an eco­nom­ics pro­fes­sor at Ts­inghua Univer­sity in Bei­jing. Govern­ment goals to cut over­sup­ply in smaller cities and con­trol­ling the bub­ble in big­ger ones "are con­tra­dic­tory," he said. China has sought to bal­ance sus­tain­ing eco­nomic growth while con­trol­ling cap­i­tal out­flows and man­ag­ing the yuan and stock mar­kets.

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