Summary: On February 16, the Chinese government enacted a series of purchase limit policies driven at capping the formerly soaring home prices. However, it seems that this policy has turned out to be more harmful than beneficial for the Chinese real estate sector, as home sales in almost all areas are being drastically reduced. In the first quarter of this year, more than 20,700 homes have changed hands, which represents a decrease of nearly 40% from this time last year. According to Beijing Home-Like House, only 5,500 new homes, or 25% of the new home purchases in the first quarter, were traded from mid-February to the end of March. Lin Lei, who is in charge of marketing with 21 Century Real Estate, said that home prices in China have not really changed since the government enacted purchase limit policies. However, he says, if the government were to really crack down on the housing market, prices could plummet. These new purchase limits prohibit new home purchases by Beijing families who own two or more apartments and non-Beijing families who own at least one apartment. The previously soaring home prices had the people of major cities in uprage. This is considered to be the most ambitious housing price control in any of the 40 major cities in China. Industry leaders say that Beijing is the first city that has actually caused a strict price decline.
Significance:
The way the government manipulates the housing market in China is very reminiscent of the manner in which the government takes on all facets of politics, economics, and business. The idea of a very "strong government" is very pronounced here because of China's ability to do whatever it wants with the housing prices. No real outside force or economic mogul can have much say in what the government does. The article also mentions the idea of how people have been speaking out against the soaring home prices. I thought this was an interesting display of political culture because it is odd that in a country of such totalitarianism like China, most forms of protest are outlawed. However, as we mentioned in class, protest that does not directly hurt the government is pretty much dealt with. Also, the mediums through which protests take place are important because the government will only allow protests through safe and secure methods.
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