Property market to support economy
China's economy, through reform and restructuring, will regain its growth momentum, Li Daokui, a renowned economics professor at Tsinghua University, said Monday, adding the property market will underpin overall economic growth.
The nation's economy has touched bottom and will have a U-shaped recovery, Li said in an interview with a media outlet of the Boao Forum for Asia, which opened Tuesday in South China's Hainan Province.
The minimum GDP growth rate could range from 6.5 percent to 6.7 percent, and that rate could rebound to 7 percent, Li was quoted as saying by a report on financial news portal stcn.com Tuesday.
China set its growth target for the next five years from 6.5 percent to 6.9 percent, while planning to take move forward with its robust reform plans.
Li said government support for a market-oriented economy, human capital and opening-up to developed economies are favorable conditions for the Chinese economy to further grow.
A weak global economy, which is affecting both developed and emerging markets, has caused external demand to dwindle, Li noted.
Li also reaffirmed an earlier statement in which he said investment in the property market will contribute to an economic recovery in 2016.
"In the first three months of the year, we've seen a hike in housing prices in Shanghai, Beijing and Shenzhen. This means investment in the property sector will increase in first-tier and some second-tier cities, as an increase in supply is the only way to rein in housing prices," Li said.
In third- and fourth-tier cities, clearing unsold housing inventory will take more time but the supportive function of the property sector for the overall economy will remain unchanged, said Li.
Latest official data showed that there are improving signs in other areas, particularly in fist-tier and some second- and third-tier cities.
The National Bureau of Statistics said on Friday that 32 of the 70 cities covered in its monthly survey saw prices increase year-on-year in February, compared with 25 in January.
Hu Feichuan, an analyst with financial information provider rong360.com, said policies such as transaction fee reductions and lower down payment requirements will ensure the housing market to support the economy in 2016.
"With policy encouragement, some third- and fourth-tier cities will gain population inflows from rural areas or other parts of the country. Those cities will more likely see a recovery, and they will be faster to consume their housing inventories than those that face population outflows," Hu told the Global Times Tuesday.
The property market is where people invest in search of gains from higher values, but there is also the risk of a property bubble, Hu warned.
