Reflection on Chfs

CHINA ECONOMY

Report Theme:

Reflection on the CHFS

Submitted by:hillarynie

Date：19/07/2012

The CHFS report had caused heated discussion in the whole society. We are very interested in the household owning rate which is 89.9%. That may be the core of discussions. I first think the data should be correct as a data collector in the last summer vacation. The house price is very high and actually we do have houses. The drastic reaction of the citizens is not because they do not have houses but they think the house price is too high and they have been suffering a lot to owning it. The high price of house is the true focus. So why do we Chinese have to have houses? Of course, if we have a lot of money we can buy houses at any time we like, but if we cannot afford a house why should we buy houses?

I think there are two reasons. One is from the government and the other is from the individual.

First, we should think of the question: Is house a good? Should we let the market control the price? Whether a resource should be controlled by the government depends on three managements: enter barrier (such as nature monopoly and collusion) management, inter management, and outside management which is categorized by Dania.F. The condition of the real estate in China has the nature monopoly and collusion problems

The monopoly comes from the scale resources of the land and only wealthy corporation can have access to the land to build houses ordered by the urban real estate administration which is set up in 1994. The scale land makes it hard for individuals and small corporations to enter real estate in China and the giant corporations can lift the house price by collusion. So the house price should be controlled by the government.

For the central government, it should change the official valuation system which is mainly focus on the local GDP. When all attention is focused on the GDP, the local officials will sell the land at...