1/6
Very good article on the benefits of implementing Chinese property taxes and the difficulties Beijing faces in doing so: "A property tax could alter China’s economic model, reshaping government revenue streams from land sales to taxes."
ft.com/content/d4b2c1…
Very good article on the benefits of implementing Chinese property taxes and the difficulties Beijing faces in doing so: "A property tax could alter China’s economic model, reshaping government revenue streams from land sales to taxes."
ft.com/content/d4b2c1…
2/6
The article however cites proponents of the tax as arguing among other things that a tax could also "help dent the appeal of property investment, redirecting private capital towards sectors such as high-tech exports and services that boost domestic consumption."
The article however cites proponents of the tax as arguing among other things that a tax could also "help dent the appeal of property investment, redirecting private capital towards sectors such as high-tech exports and services that boost domestic consumption."
3/6
I disagree. Investment flows into non-productive investment in property and infrastructure don't detract from capital available for productive investment. The whole point of investment in property and infrastructure has been to absorb savings that can't otherwise be utilized.
I disagree. Investment flows into non-productive investment in property and infrastructure don't detract from capital available for productive investment. The whole point of investment in property and infrastructure has been to absorb savings that can't otherwise be utilized.
4/6
That is why reducing the former will not increase the latter. On the contrary, China has to export a substantial portion of its excess savings through direct and indirect reserve accumulation, even though the returns in RMB terms have been very low or negative for years.
That is why reducing the former will not increase the latter. On the contrary, China has to export a substantial portion of its excess savings through direct and indirect reserve accumulation, even though the returns in RMB terms have been very low or negative for years.
5/6
If instead of exporting the savings they could have invested productively in domestic projects, they would have gladly done so.
If investment in property declines, in other words, the result will not be an increase in investment in more productive parts of the economy.
If instead of exporting the savings they could have invested productively in domestic projects, they would have gladly done so.
If investment in property declines, in other words, the result will not be an increase in investment in more productive parts of the economy.
6/6
It will be either an increase in other forms of non-productive investment (mainly infrastructure), a greater trade surplus, or slower growth. These are the only options.
It will be either an increase in other forms of non-productive investment (mainly infrastructure), a greater trade surplus, or slower growth. These are the only options.
1/3
Hu Xijin tells readers of Global Times that they must calm down when considering the impact of a property tax, and then adds: "As for young people who do not own their own apartment, they should still buy one as planned."
globaltimes.cn/page/202110/12…
Hu Xijin tells readers of Global Times that they must calm down when considering the impact of a property tax, and then adds: "As for young people who do not own their own apartment, they should still buy one as planned."
globaltimes.cn/page/202110/12…
2/3
"There is no problem in waiting for a while to observe trends," he continues, "but there is no need to wait until house prices fall off a cliff due to the levying of property tax. I can say with certainty that such a scenario will never happen."
"There is no problem in waiting for a while to observe trends," he continues, "but there is no need to wait until house prices fall off a cliff due to the levying of property tax. I can say with certainty that such a scenario will never happen."
3/3
And finally, he proposes, "Our country will not allow such a situation to occur, and will not introduce radical tax reforms that could lead to the 'collapse' of the housing market."
And finally, he proposes, "Our country will not allow such a situation to occur, and will not introduce radical tax reforms that could lead to the 'collapse' of the housing market."
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