During a press conference in Beijing, senior party official Han Wenxiu stressed the need for establishing a foundational system for financing, taxation, and land sales compatible with real estate development. He highlighted the urgency of restructuring China's property industry to eliminate issues like high debt, rapid turnover, and excessive leverage. This restructuring aims to ensure sustainable development and financial stability. Han's remarks indicate a shift towards more regulated real estate management, focusing on prudent financing, effective taxation policies, and controlled land sales to mitigate risks and promote long-term stability in the market, balancing economic growth with financial security.
During a press conference held in Beijing following a significant party meeting last week, senior party official Han Wenxiu emphasised the necessity of establishing a foundational system for financing, taxation, and land sales that aligns with the development of the real estate sector. Han Wenxiu, who is deeply involved in financial and economic affairs, highlighted the imperative for China to accelerate its efforts in restructuring the property industry. This restructuring aims to eliminate previous problematic features such as high debt levels, rapid turnover, and excessive leverage that have characterised the sector in the past.
In addressing the media, Han Wenxiu underscored that the establishment of a robust and compatible system for financing, taxation, and land sales is crucial for the sustainable development of the real estate market. He stressed the importance of creating a more stable and regulated environment that would prevent the recurrence of issues that have plagued the industry. "It is necessary to establish a basic system of financing, taxation, and land sales compatible with the development of real estate," Han Wenxiu stated, reflecting the government's commitment to reforming the sector.
The call for restructuring comes amid growing concerns about the financial stability of the property market in China. The government aims to curb speculative practices and ensure that the real estate industry contributes positively to the overall economy without causing systemic risks. Han Wenxiu's remarks indicate a shift towards more prudent and controlled management of the real estate market, moving away from the high-risk strategies that have previously driven growth but also led to significant financial vulnerabilities.
Han Wenxiu elaborated on the specific areas that need attention, pointing out that high debt levels, fast turnover of properties, and the use of high leverage have been detrimental to the stability of the market. These issues have not only posed risks to individual companies but also to the broader financial system. By addressing these concerns, the government aims to create a healthier and more resilient real estate sector.
The restructuring efforts will likely involve comprehensive reforms in how real estate financing is conducted, with stricter regulations to limit excessive borrowing and ensure that funds are used effectively and responsibly. Taxation policies will also be reviewed to ensure they are conducive to sustainable growth and do not incentivise speculative investments. Additionally, the process of land sales will be reformed to prevent rapid turnover and ensure that land is used in a manner that supports long-term development goals.
Han Wenxiu's statements also suggest that the government is keen to balance the need for economic growth with financial stability. By reforming the real estate sector, the government hopes to mitigate the risks associated with high debt and leverage, which have been significant factors in recent financial crises. The aim is to build a more stable foundation for future growth, one that is less reliant on risky financial practices and more focused on sustainable development.
In conclusion, Han Wenxiu's remarks at the press conference highlight a pivotal moment in China's approach to managing its real estate sector. The call for a basic system of financing, taxation, and land sales that is compatible with real estate development reflects a broader strategy to reform the industry, reduce financial risks, and promote long-term stability. As China moves forward with these reforms, the focus will be on creating a more regulated and stable market that can support sustainable economic growth without compromising financial security.
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