(Yicai Global) April 17 -- A property tax system covering real estate transactions should be established by advancing fiscal and taxation reform, and local governments should be allowed to pilot their own property tax policies in the absence of national legislation, suggested Zhu Baoliang, head of the economic forecast department and chief economist at the State Information Center.
Real estate has a long industry chain and strongly leverages related businesses and, in the absence of a long-term real estate regulatory mechanism and with the postponed property tax legislation, rollouts of new government regulation measures may adversely affect the stability of economic growth, Zhu said.
Efforts must go toward improving the existing land supply system among local governments, adjusting and optimizing the construction land milieu, increasing residential land supplies in cities with excessively high property prices, enhancing the transparency of land supply information, and tightening up performance appraisal and supervision of the implementation of annual land-supply plans, Zhu proposed, adding that the housing finance system must also further develop to provide mid- to low-income homebuyers with greater financial support, and a housing finance bank should be established.
The top priority for the Chinese economy is to reduce risks associated with the bond market and non-performing assets in the banking sector, properly handle defaults on corporate bond repayment, ensure normal financing via the bond market, closely monitor debt repayment-related risks to avoid defaults from concurrently occurring, focus on credit risks and short-term debt repayment risks in overcapacity industries, gradually abolish 'mandatory' government bailouts, and create a market-oriented default handling mechanism based on the rule of law, clamp down on illegal activities in the capital market, strengthen law enforcement, and reinforce order in capital markets to protect investors' interests, he advised.
Zhu forecast China's gross domestic product would grow around 6.8 percent in the first quarter.