Wednesday, April 20, 2011

China providing pensions for farmers and low income housing

China’s central government will raise its allocation for affordable housing and rebuilding of shantytowns by 18 billion yuan ($2.8 billion), Premier Wen Jiabao said at a State Council meeting today.
An additional 12.3 billion yuan will also be allocated to subsidize farmers’ pensions to ensure coverage of 60 percent of those eligible from an originally planned 40 percent, according to a statement posted on the government’s website after a meeting chaired by Wen.
Central and local governments will only provide 500 billion yuan of the 1.3 trillion yuan needed to meet the target of building 10 million units of affordable housing this year, excluding land costs, Housing and Urban-Rural Development Vice Minister Qi Ji said last month. Finding the money to build the 36 million units planned over the next five years may be the government’s biggest challenge, real-estate services firm Cushman & Wakefield Inc. said last month.
The nation’s banks must support the government’s plans for low-cost housing and work out methods to ensure such loans are repaid, China Banking Regulatory Commission Chairman Liu Mingkang said in a statement posted on its website yesterday.
The government will “deepen social reforms, safeguard and improve people’s livelihood,” Wen said in today’s statement after the meeting held to discuss economic reforms. Taxation policies for the real-estate industry will be adjusted and improved, he said.

Power-Price Reform

Wen reiterated the pledge he made in his work report to the National People’s Congress in March to push forward with interest-rate liberalization, pricing reform of power and refined oil products and trials of a resources tax, according to the statement.
Central bank officials in China, home to four of the world’s 10 biggest lenders by market value, have said the nation aims to move towards more efficient pricing and allocation of capital. The People’s Bank of China, which controls deposit and lending rates, should allow lenders to raise savings rates “by a certain degree” to help contain inflation, Sheng Songcheng, head of the PBOC’s statistics and analysis department said in December.
China, the world’s second-biggest energy consumer, may expand the coverage of resource taxes to 12 provinces in central and western areas this year, covering oil, gas and coal, Zhu Fang, chief researcher at the government-backed China Petroleum and Chemical Industry Association said in January.
--Xiao Yu in Beijing. With assistance from Alfred Cang in Shanghai. Editor: Nerys Avery
To contact the reporter on this story: Xiao Yu in Beijing at yxiao@bloomberg.net To contact the editor responsible for this story: Gregory Turk at gturk2@bloomberg.net

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