China tightens chances to gain residency permit

In February, officials in Xi’an, the home of China’s famed terracotta warriors, loosened the requirements to gain a residency permit, a prerequisite to buy property in the city. Then, when data showed last month that local house prices had surged a nation-leading 2% in May, officials suddenly reversed course, ruling non-local residents needed to have at least five years of tax records or social-insurance contributions to be allowed to buy property. The rapid U-turn and oddly precise rules highlight the vast array of policy levers Chinese authorities have at their disposal as they seek to pop housing bubbles before they inflate, while keeping the economically crucial property industry chugging along. While countries such as Australia, Singapore or the U.S. confront surging house prices with restrictions of foreign buyers, tightened loan-to-value limits or higher interest rates, China’s all-powerful Communist government has free range to fine-tune the housing market as it sees fit.