Tuesday, 5 March 2013

Chinese stocks plunge, growth target unchanged

There may be less pressure for tightening of China's monetary policy for now (see yesterday's post) but the measures to curb property prices announced last week appear to have been enough to spook investors on Monday. From AFP/CNA:

Chinese shares fell 3.65 percent to close at a seven-week low after the government last week unveiled fresh measures to cap rising property prices, dealers said...

Among the new rules announced by Beijing on Friday was a 20 percent capital gains tax on home sales, well up from the previous one to two percent of the sale price.

The government also ordered the central bank to raise downpayments and mortgage lending rates for buyers of second homes in some cities, and told local governments to limit non-residents from buying more than one home.

In other news out of China on Monday, the government has set its 2013 economic growth target at 7.5 percent, unchanged from last year. Its inflation target was lowered to 3.5 percent from 4.0 percent last year.

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