Housing industry hit by 'cancerous corruption'
By Wang Xiang |
March 12, 2010, Friday
|
Print Edition
Print Edition
A Chinese political adviser believes the government should take a hard line to wipe out ingrained corruption in the real estate industry to curb overblown housing prices.
Ren Yuling said corruption among local officials was the foremost reason that China's housing prices had surged so much in the past few years.
He said the trend had continued unabated despite many regulations issued by the State Council, the nation's Cabinet, designed to rein in prices.
The real estate industry had become a hotbed for corrupt officials because profits were so high, he said.
Almost every corrupt official in recent years took money from real estate companies, according to Ren.
For example, a former deputy president of the Standing Committee of the National People's Congress, Cheng Kejie, took more than 40 million yuan (US$5.86 million) from real estate companies and a former vice mayor of Suzhou City took more than 100 million yuan.
Both officials were executed for corruption.
Ren said he witnessed an investigation into a low- ranking official in charge of land deals in south China's Guangxi Zhuang Autonomous Region.
Police found more than 3 million yuan in cash under his bed only six months after he took the post.
"Party disciplinary watchdogs should focus on the cancerous corruption in the housing industry as it is a key to solve the enigma of China's high housing prices," Ren said.
He chided people who say there is no profiteering in the real estate market.
Ren said he knew a person who earned more than 10 million yuan from one deal after he bought a parcel of land at one eighth the market price from the government.
Ren said a real estate operator told him that he earned about 15 percent profit dealing in United States real estate but could gain 10 times more in China.
Ren's comments struck a chord with people as the housing issue is prominent at the ongoing National People's Congress session.
The State Statistics Bureau said on February 28 that China's house prices increased only 1.5 percent in 2009.
Political adviser Wang Chaobing from central China's Henan Province said: "No one in the world would believe that."
Ma Jiantang, the head of the bureau, admitted that the system in computing house price indexes was problematic, Xinhua news agency reported last week.
Ren Yuling said corruption among local officials was the foremost reason that China's housing prices had surged so much in the past few years.
He said the trend had continued unabated despite many regulations issued by the State Council, the nation's Cabinet, designed to rein in prices.
The real estate industry had become a hotbed for corrupt officials because profits were so high, he said.
Almost every corrupt official in recent years took money from real estate companies, according to Ren.
For example, a former deputy president of the Standing Committee of the National People's Congress, Cheng Kejie, took more than 40 million yuan (US$5.86 million) from real estate companies and a former vice mayor of Suzhou City took more than 100 million yuan.
Both officials were executed for corruption.
Ren said he witnessed an investigation into a low- ranking official in charge of land deals in south China's Guangxi Zhuang Autonomous Region.
Police found more than 3 million yuan in cash under his bed only six months after he took the post.
"Party disciplinary watchdogs should focus on the cancerous corruption in the housing industry as it is a key to solve the enigma of China's high housing prices," Ren said.
He chided people who say there is no profiteering in the real estate market.
Ren said he knew a person who earned more than 10 million yuan from one deal after he bought a parcel of land at one eighth the market price from the government.
Ren said a real estate operator told him that he earned about 15 percent profit dealing in United States real estate but could gain 10 times more in China.
Ren's comments struck a chord with people as the housing issue is prominent at the ongoing National People's Congress session.
The State Statistics Bureau said on February 28 that China's house prices increased only 1.5 percent in 2009.
Political adviser Wang Chaobing from central China's Henan Province said: "No one in the world would believe that."
Ma Jiantang, the head of the bureau, admitted that the system in computing house price indexes was problematic, Xinhua news agency reported last week.
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