China will not use property as vehicle for stimulus

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© Reuters. FILE PHOTO: Chinese Vice Premier Han Zheng attends the closing session of the Chinese People’s Political Consultative Conference (CPPCC) at the Great Hall of the People in Beijing, China May 27, 2020. REUTERS/Thomas Peter/Pool

BEIJING (Reuters) – China will not use the property market as a vehicle for short term economic stimulus, state television quoted Vice Premier Han Zheng as saying on Thursday, affirming the current stance.

Local governments should strictly control financing for property developers, including bank loans, and improve land pricing mechanisms, Han was quoted as telling a conference on the property market.

China aims to solve housing problems in big cities, establish sound rental pricing mechanisms, and accelerate the development of affordable rental housing based on cities’ conditions, Han said.

China’s property market has rebounded quickly from the COVID-19 shock, raising concerns about financial risks and overheating. Late last year, authorities began stepping up curbs on the sector, including restricting debt accumulation.

New home prices rose in June at the slowest clip since April and property investment at its weakest pace this year as government measures to cool the housing market further tapped the brakes on growth.

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