China plans to keep 'hot money' out of realty market

BEIJING: China vowed on Sunday not to let foreign speculative investment affect the property market, the latest expression of official concern that real-estate prices are racing ahead too fast. The directive from the State Council, China’s cabinet, will serve as a guideline for local authorities and ministries, including the People’s Bank of China and the China Banking Regulatory Commission, to work out detailed policies.

“Relevant departments must enhance monitoring of loans and cross-border investment to prevent illegal inflows of capital into the property market and to avoid the impact of overseas hot money on China’s real-estate market,” the cabinet said.

It said the central bank and banking regulator should step up oversight and “window guidance” of mortgage lending. About one-sixth of China’s nearly 10 trillion yuan ($1.5 trillion) in new loans last year flowed into the property sector.

Concerned that a property bubble could stir social and economic instability, Beijing has vowed to combat overly fast price increases, although its moves to date, such as restricting sales tax exemptions, have been relatively mild.

The cabinet urged local authorities, especially in cities where housing prices are rising sharply, to increase the supply of affordable housing.

It reiterated that it would curb house buying for “investment and speculation purposes” and keep the minimum down payment for purchases of second homes at 40 percent. China’s central bank said this week that it would pay particularly close attention to the property market in 2010 while managing inflationary expectations.

Crude oil imports at record
China increased crude oil purchases to a record last year to meet rising demand spurred by the government’s $586 billion stimulus spending. Crude oil imports reached 203.8 million metric tonnes last year, or 4.1 million barrels a day, according to preliminary data released by the General Administration of Customs on Sunday. Net purchases reached a record 198.7 million tonnes.

Government stimulus may boost China’s 2009 economic growth by more than 8%, according to official forecasts. The world’s fastest-growing major economy may increase its refining capacity by 2.9 million barrels a day between 2008 and 2014 to meet increased fuel consumption, the Paris-based International Energy Agency said in a report on December 11.

“Oil imports have surged in 2009 also as the nation has been increasing emergency stockpiling,” Wang Aochao, head of China energy research at UOB-Kay Hian, said by telephone in Shanghai. “We expect imports to still rise more than 10% this year.”

China has finished building its emergency oil reserves under the first phase of its stockpiling plan, the National Energy Administration said in June. Late last year, the country started building stockpile bases under the second phase.

Net crude oil imports rose to 20.9 million tonnes last month, from 16.7 million tonnes in November, data showed.
Imports of oil products, including gasoline and diesel, fell 5.4% to 37 million tonnes last year and reached 3.3 million tonnes in December, the customs data showed. Exports of oil products gained 46% to 25 million tonnes in 2009 and stood at 3.67 million tonnes in December.

Exports of coal, used in power generation and steelmaking, declined to 22.4 million tonnes in 2009 and stood at 2.07 million tonnes in December from 1.43 million tonnes in November. The customs agency didn’t give coal import figures.