China’s Millions Of Homes Remain Unsold
The Chinese economic slowdown in the third quarter of the current financial year unveils the problem of the growing debt in the real estate industry in the country with millions of houses unsold and unoccupied. The Chinese government has suddenly woken up to a revelation that the slowdown in the economy is not just because of the unsettling power shortages and shipping disruptions, but also the real estate debt that has mounted to USD 5 trillion, according to The Hong Kong Post. The Chinese GDP is said to have grown by a mere growth rate of 4.9 per cent in the third quarter and the source of the current economic problem lies in this sector where there are several companies that are facing deep trouble. "Compared to the prior quarter, the economy grew a mere 0.2% in the July-to-September period one of the weakest quarters since China started releasing such records in 2011. But some of the most significant concerns for growth are now rippling through the real estate sector, which is suffering from the energy woes along with a government drive to curb excessive borrowing," as said. Talking about the problem in the simplest language, the root of the problem in the real estate sector lies in the non-availability of property tax in the country, which means that a person does not have to pay any tax to the government for owning a property in China as prices rise and profit increases. Chinese President Xi Jinping has time and again mentioned the need for the introduction of property tax, however, he is faced with opposition in the way. The reason is simply understandable. Introducing the taxes on the property would lead to having the database of the property owners who reportedly happen to be officials, politicians and businessmen, whose names the government will have access to. So the fear is real when it comes to letting the government bring real estate under the tax system.
Tags : INTERNATIONAL property tax GDP economic slowdown Chinese Government Xi Jinping Tax System