Boosting rental home market requires more reforms

Illustration: Peter C. Espina/GT

The push for simultaneously developing the rental and sales markets for housing has been going well in China, with many relevant policies announced. Nine government bodies including the Ministry of Housing and Urban-Rural Development have recently urged the accelerated development of the rental market in bigger cities that have net population inflows.

The government has designated 12 cities for a pilot program aimed at boosting the country’s rental market. Some cities on the list including Guangzhou in South China’s Guangdong Province, Zhengzhou in Central China’s Henan Province and Hangzhou in East China’s Zhejiang Province have already actively responded to the call.

A handful of cities that have yet to be included in the trial program, such as Wuxi and Yangzhou in East China’s Jiangsu Province, Jinan in East China’s Shandong Province, and Shanghai, have announced their own policies favoring rental housing.

Strong support for the home rental segment is an important aspect of building a long-term oversight mechanism for the housing market. In doing so, China can fill housing supply gaps and improve the chain of consumption that ensures supply at the lower end of the market, meets middle-range needs and curbs the demand for high-end units. But it’s important to understand the intention and impact of the trial program, which isn’t merely aimed at lowering housing prices and rents.

The launch of the trial program sparked heated discussion about reforms that envision giving renters the same rights as property owners, but renters will not have full parity with homeowners. When it comes to school enrolment, for example, the fact that renters may be qualified because of location to send their children to nearby schools doesn’t mean that the children are automatically eligible for admission. Renters still must meet certain conditions to be able to join the queue for school admissions, such as having a local hukou, or household registration, and owning property.

So when it’s said that renters are qualified to queue for a place for their children in a school, it only means that they can take advantage of such things as unused quotas in local schools.

Giving tenants the right to enjoy public services that have long been associated with property ownership would only be part of an effort to improve admissions conditions for rental tenants’ children in public schools during the years of compulsory education in China. Renting basically rules out the possibility of entering the best schools.

Actually, policies that allow renters to send their children to neighboring schools have been in place for years in many cities across the country.

But particularly in bigger cities experiencing a population influx, where many people are jostling for access to high-quality educational resources, it has become a common problem that these cities simply don’t have enough for everyone’s needs and homes in school districts continue to be a focus of competition.

If there are no increased commitments to educational resources, the issue of school district homes won’t be fundamentally resolved and prices of homes in school districts that are intrinsically powered by admission quotas will hardly be affected. It’s easy to imagine that if school district homes can be rented, not only owned, allowing admission to prime schools, either rents for those units will skyrocket or the properties will be rare as the competition for school district homes grows even fiercer.

As for the problem of granting hukou to renters, it needs to be sorted out with which household the hukou should be registered. If renters register their hukou with rental homes, there may be disputes in the future if they don’t want to transfer their hukou when the lease runs out, thus weighing on rental supplies by individuals.

A more regulated and workable method would be to create a unified management regime of collective hukou at residential compounds, but that would require more detailed policies.

The household registration system has long hindered the free flow of talent, restricted exchanges between urban and rural areas and among different regions of the country, thwarted efforts to narrow the gap between rich and poor and slowed plans for further urbanization. Qualifying tenants for local household registration is an attempt to facilitate the flow of talent, but it doesn’t go far enough to break the shackles. The crux of the problem lies in the household registration system and the government should push for a set of complementary reforms that would genuinely end the rigid stratification of people emanating from the hukou system.

Currently, a hukou remains a “pass” to access scarce public resources such as education, employment, healthcare and social security, and it has naturally turned out to be a lure extended by varied cities to attract talent. It seems that the cities that grant rental tenants local hukou in the near future are more likely to be the ones that already have comparatively loose housing registration policies.

Bigger cities with net population inflows will potentially set high bars even if they also allow rental tenants to apply for a local hukou.

There’s another factor to consider: China needs to reduce the cost and increase the efficiency of the professional leasing businesses. Property developers rely on the traditional business model of buying parcels of land for development, which produces rapid returns. Large-scale leasing businesses operate in another way however.

The shift from property developers toward leasing business operators is not just a test of property companies’ operational and managerial strengths. It’s also a challenge for them to maintain liquidity during the long period it will take to recoup their costs. Policies must be drawn up to offer substantive benefits to property companies that will induce them to shift toward the leasing model. Efforts should focus on cutting costs, which means subsidies, tax breaks, and lower prices for land on which rental units will be built. Of course, under China’s construction land quota system, the allocation of land for building rental homes shouldn’t come at the cost of sacrificing the area provided for housing units for sale. A failure to achieve this balance will trigger land and home price hikes.

Furthermore, measures should be considered that will increase the yields of investing in leasing for there to be a turnaround in the rent-to-sales ratio, which has for long been excessively low. Only if China makes efforts that go well beyond the pilot program, can housing speculation be fundamentally eased.

Source: Global Times

China envisages development of Sino-US ties in next 50 years

Photo: Xinhua

Chinese foreign minister Wang Yi vowed to map the development of Sino-US relations for the next 50 years during his talks with US Secretary of State Rex Tillerson, which Chinese analysts said signals a significant point of transition in bilateral ties following China’s fast development over the past decades.

Wang and Tillerson met on the sidelines of the East Asia Summit Foreign Ministers’ Meeting and at a series of other meetings which are being held in the Philippine capital city of Manila on Sunday, the Xinhua News Agency reported.

The importance of the next stage is to plan and prepare for US President Donald Trump’s visit to China within this year, hold the Law Enforcement and Cyber Strategic Dialogue, and the Social and People-to-People Dialogue … and to map the development of Sino-US relations for the next 50 years, Wang said, according to the official website of China’s foreign ministry.

The relationship between China and the US has on the whole maintained stable growth, but there are still some sensitive issues that need to be handled carefully, Wang said.

Tillerson said that the two sides should seriously think about how to define bilateral relations for the next 50 years based on current successes, Xinhua reported.

“China has been open in diplomacy and is actively pursuing interaction with the US, which has been adjusting its recognition of China as a major power,” Li Haidong, a professor at the Institute of International Relations of China Foreign Affairs University, told the Global Times on Monday.

“Relations between China and the US, two of the biggest countries that have great global influence, could affect the direction of the international model [of relations]. So a good relationship could ensure stable and peaceful progress in international society,” Li noted.

“To define Sino-US relations for ’50 years’ has made the goal more specific and workable,” he said.

For the foreseeable future, as the economies, societies and people-to-people communications between the two countries are very close, the common interests of China and the US are more consequential than they are divergent, so there will not be any major decline in relations, Li said.

The US currently sees the Korean Peninsula, the South China Sea and freedom of navigation, and cyber security as issues that need attention, while China’s emphasis is on maintaining sovereign integrity and developing economic trade, Li said.

However, Liu Weidong, a research fellow at the Institute of American Studies of the China Academy of Social Sciences believes that the future of Sino-US relations depends more on their domestic policies.

“Trump is now in a terrible fix as he is facing an unprecedented confrontation in US politics, while China will decide its overall policy for the future in the upcoming 19th National Congress of the Communist Party of China (CPC),” Liu noted.

If China and the US manage their own domestic issues well, then Sino-US relations will also naturally go smoothly, Liu said.

“A roadmap for the next 50 years is a sound goal. Even though the recent relationship will probably have great influence on the future, it is more important to focus on existing issues,” Liu noted.

Trump visit to China

Chinese President Xi Jinping on April 6 extended an invitation to Trump for a state visit to China in 2017. Trump accepted the invitation with pleasure, and hopes to make the trip at an early date, Xinhua reported.

China has invited Trump’s daughter, Ivanka Trump, and son-in-law and special adviser Jared Kushner to visit Beijing later this year, a White House official said in June, Reuters reported.

Also in June, China and the US held a high-level dialogue on diplomatic and security issues, vowing to promote bilateral ties by broadening cooperation and managing differences, Xinhua reported.

The dialogue is one of the four high-level mechanisms established during the meeting between Xi and Trump at Mar-a-Lago, Florida, in April.

“The implementation of the four mechanisms and Ivanka Trump’s visit, as well as many efforts that may not be public, are all in preparation for Trump’s visit to China,” Liu said.

The 100-day plan China and the US agreed on at Mar-a-Lago has made some achievements and has been recognized by both governments, which could pave the way for the upcoming meeting between Xi and Trump, Li said.

“Effective interactions between the two leaders could help build on the Sino-US relationship,” Li said.

“However, Trump may not see his visit to China as China sees it, which is more symbolic than strategic,” Liu noted.

Source: Global Times

China urges talks between North Korea and South Korea

Riot police block a road as protesters march to the US embassy in Manila on Monday, during the 50th Association of Southeast Asian Nations (ASEAN) regional security forum. Protesters criticized ASEAN as hollow, arguing that the region is still the site for fast rising inequality and persistent poverty. Photo: AFP

China’s foreign minister on Monday said China supports initiatives put forward by South Korea to handle tensions on the Korean Peninsula and that Beijing was ready to see contact made soon between the North and South on the issue.

Wang Yi told reporters on the sidelines of a regional security meeting in Manila that he hopes those countries could improve relations, and that North Korea’s foreign minister did not entirely reject proposals voiced by his South Korean counterpart.

North Korea foreign minister Ri Yong-ho told his South Korean counterpart Kang Kyung-wha in a meeting on Sunday that Seoul’s proposal to improve ties with the North “lacks sincerity,” Yonhap News Agency reported on Monday.

On Monday, South Korean President Moon Jae-in and US President Donald Trump spoke on the phone and agreed to apply maximum pressure and sanctions on North Korea.

The call comes after the UN Security Council unanimously imposed new sanctions on North Korea on Saturday aimed at pressuring Pyongyang to end its nuclear program.

The resolution bans North Korean exports of coal, iron, iron ore, lead, lead ore and seafood following Pyongyang’s two intercontinental ballistic missile tests in July.

It also prohibits countries from increasing the current number of North Korean laborers working abroad, bans new joint ventures with North Korea and any new investment in current joint ventures.

“This resolution serves the objective of safeguarding peace and stability on the Korean Peninsula and in the region, advancing the denuclearization process on the Korean Peninsula and upholding the international non-proliferation regime,” foreign ministry spokesperson Geng Shuang said in a statement on Sunday.

While imposing new sanctions on North Korea, the resolution also stresses that the sanctions should avoid negatively affecting economic activities and cooperation that are not prohibited by the resolution as well as activities that are not prohibited by the Security Council, including food and humanitarian aid, the statement said.

The situation on the Korean Peninsula remains complex and sensitive. China calls on relevant countries to remain restrained and make positive efforts to ease tensions and properly resolve the Korean Peninsula issue, it added.

North Korea denounced the sanctions, saying they infringed on its sovereignty and vowed to take “righteous action,” according to the North’s official news agency.

Pyongyang would never place its nuclear program on the negotiating table as long as the US maintained a hostile attitude against the North, said North Korea’s government statement.

Source: Reuters – Global Times

Tests on China’s first homegrown aircraft carrier to begin ahead of schedule

China’s first domestically built aircraft carrier, decorated with red flags and colorful ribbons, prepares to launch from Dalian Port, Northeast China’s Liaoning Province on April 26. Photo: Cui Meng/GT

China has started to test the power system of its first domestically-built aircraft carrier, and is hoping to begin a mooring test next month ahead of schedule, said the general director of the project on Monday.

Hu Wenming, the head of the China Shipbuilding Industry Corporation who has chaired the research and development of the Type 001A carrier, revealed the tests on Monday during an interview with China Central Television’s Asia Today.

“The start of mooring test will signify that the aircraft carrier’s engine and electric power supply are capable of functioning properly and independently. And I believe that we can manage to begin the mooring test next month,” Hu continued, explaining this will show whether the vessel’s equipment is ready for a sea test.

A mooring test and a sea test are the final hurdles an aircraft carrier must pass before it comes into active service, according to Hu.

The Type 001A, China’s second aircraft carrier, was launched in Dalian, Northeast China’s Liaoning Province on April 26.

Source: Global Times

India’s reaction over possible military operation in Doklam reflects lack of self-confidence: expert

A Chinese scholar’s remarks about possible small-scale military operation to expel Indian troops in China’s Doklam region have caused a stir among Indian media over the weekend. Experts say India’s reaction over the remarks reflects the country’s lack of self-confidence.

Last week, Hu Zhiyong, a research fellow at the Institute of International Relations of the Shanghai Academy of Social Sciences, told the Global Times: “If India refuses to withdraw, China may conduct a small-scale military operation within two weeks.”

Hu’s statement quickly became headlines in Indian media. Different from previous rhetoric, Indian media included a government statement that stressed dialogue is the only way to resolve the conflict.

On Aug. 5, Indian Prime Minister Narendra Modi expressed hope that the two countries will find a solution through dialogue but did not make clear what he was referring to.

Two days before Modi’s statement, Indian External Affairs Minister Sushma Swaraj was quoted by The Tribune as saying diplomatic channels are the only way to resolve the standoff with China and China has been contributing to India’s growing economic might.

India’s speculation of China’s possible military operation in Doklam and Indian government’s statements over the standoff all indicate the country’s guilty conscience, Hu pointed out.

Meghnad Desai, an India-born UK economist and commentator on South Asian affairs, predicted that the standoff could soon spiral into an all-out war involving the U.S., which he said, would support India. He also said India cannot stand up to China without American help and support. Likewise, America cannot stand up to China without Indian help.

Being too nervous about a scholar’s comments about a possible military operation and counting on the speculated “aid” from the U.S. reflect India’s lack of self-confidence, said Long Xingchun, director of the Center of India Studies at China West Normal University, in an interview with the Global Times.

Over the last two weeks, the Indian side has been trying to play down the incident with the aim of finding a buffer zone and a way to save face, because India has been unable to find any suitable argument to defend its stance, Long noted.

Meanwhile, as the standoff continues, the Indian government is under pressure from both home and abroad. Though India suggests dialogue is the only way to resolve conflict, China has made it very clear that the premise for dialogue is the Indian troop’s withdrawal from the Chinese territory unconditionally, Hu pointed out.

Biggest-ever mushroom discovered in SW China hotel

A huge mushroom was recently spotted at the Pu’er Lesser Panda Manor Villa Resort Hotel in Pu’er city, in southwestern China’s Yunnan province, China News reported on August 5.

The mushroom, weighing 8 kilograms with a perimeter of 1.8 meters, is the largest and heaviest of its kind ever found in the region, though it cannot be eaten because it is toxic. The manor in the transitional area between tropical and subtropical climate allegedly provides good environment for fungi to grow.

At present, it has been transplanted to a secluded forest to prevent tourists from accidentally eating it.

Survey says Chinese are the world’s most optimistic citizens

Chinese are the world’s most optimistic people about the future of their country, says the monthly survey, “What Worries the World – July 2017,” released by the global market research and consulting firm, Ipsos, on August 6, Guancha.cn reported.

The report shows that 87 per cent of Chinese interviewed think that their country is going in the right direction, being the highest among all adults under aged 65 surveyed in 26 countries, including Australia, Canada, France, Britain, Germany, India, Japan, Russia, the U.S. and South Korea.

U.S. media, Axios, said economic giants, China and the U.S. are gradually becoming geopolitical rivals. Chinese are more confident about the future of their country, while most Americans are worried that their country is going downhill.

Unemployment (36 per cent), political corruption (34 per cent) and Wealth inequality (33 per cent), are the three major worries for global citizens since 2010.

Chinese participants in the survey worry most about moral decline (47 per cent), threats to the environment (40 per cent) and unemployment (31 per cent); while healthcare, terrorism as well as crime and violence, are the top three worries for Americans, the report noted.

In addition, the report pointed out that nearly 43 per cent of Americans surveyed are optimistic about their country in July 2017, down 4 per cent from the previous month, but much higher than during the presidential election in October 2016.

College students save drowning woman, donate reward to charity

Four college students recently saved a woman from drowning in Satellite Lake, Yongchuan District, in southwestern China’s Chongqing Municipality. They later donated the reward offered them as a result of the gesture, thereby moving many people by their gallantry and philanthropy, Chongqing Morning Post reported on August 7.

The students did not hesitate to jump into the lake to save the drowning woman when they heard her faint cries for help from the nearby river as they were exercising on the field. With knowledge of First Aid, they gave the rescued middle-aged woman cardio-pulmonary resuscitation before the ambulance arrived.

In appreciation, the woman’s daughter made cash gifts to the Good Samaritans, but they politely turned them down. In addition, the reward of 20,000 RMB ($2,973) offered by the Chongqing Youth Development Foundation for their gallantry was donated by the boys to poor students of a local school.

India has no reason to oppose establishment of Chinese base in Djibouti: Rear Admiral

India has no reason to oppose the establishment of a Chinese base in Djibouti, as the Indian Ocean does not belong to India, said Yin Zhuo, a rear admiral in the Chinese People’s Liberation Army Navy, according to the official WeChat account of CCTV4 on Aug. 3.

The ceremony marking the entry of troops into the PLA support base in Djibouti.

The rear admiral made the statement in response to India’s discontent over China’s establishment of its first military support base overseas in Djibouti, which is a decision made by China and Djibouti after friendly negotiations.

Yin added that the establishment of the base will help China performance its international obligations regarding humanitarianism aid and escort missions in the Gulf of Aden and the waters off Somalia.

The ceremony marking the entry of troops into the PLA support base in Djibouti was held on Aug. 1 in the base’s barracks.

China’s Central Military Commission chose a special team of 80 officers and soldiers for construction of the base on Dec. 15, 2015.

Although desert and volcanoes occupy 90 percent of the land of Djibouti, and the country is extremely short of natural resources, the team built the base in less than a year, with communication facilities and logistics support facilities basically reaching the same standards as in China, Yin noted.

As Djibouti has a unique geographical location, many countries, including the U.S., France, Germany, Italy, and Spain have bases in Djibouti.

Yin said that, although the U.S. is not used to China having bases overseas, as it will bring a certain level of political pressure, it is clear that the Chinese base will only act as a logistics supply facility rather than one for military operations.

It is obvious that the Indian Ocean does not belong to India, so any country, including China, is free to conduct its missions in the region, the rear admiral stressed.

India should welcome all countries’ participation in safeguarding the peace and stability of the region, and in achieving fruits in anti-terrorism and anti-piracy operations through international cooperation, Yin added.

China’s first homemade aircraft carrier to enter mooring trials next month

China’s first homemade aircraft carrier will likely enter mooring trials next month ahead of schedule, said Hu Wenming, general director of construction of the aircraft carrier, CCTV.com reported on Aug. 3.

Hu introduced that construction of China’s second aircraft carrier, also the country’s first homemade one, is going well after it hit the water in Dalian on April 26 this year. Hu added that the carrier will likely start mooring trials next month ahead of schedule to test if its equipment is able to meet the requirements for further sea trial.

China’s first aircraft carrier, the Liaoning, has been delivered to the Chinese Navy for training and research. China’s second carrier will be based on the Liaoning and will be among the world’s most advanced, further improving China’s research and development of aircraft carriers, according to the director.

Hu also disclosed that a total of 412 state-owned enterprises, private enterprises, and scientific research institutions in China have contributed to its development, occupying 77.4 percent of the total, which indicates that its construction is the result of national collective efforts.

In addition, through construction of the carrier, China has possessed a talent team at an average age of 36 and gained the ability to independently research and develop, design, and manage an aircraft carrier project, which has laid a foundation for the country to build better ones in the future, the director noted.