Portion Control

As China’s central government aims to rein in runaway real estate prices, new measures will restrict land auctions to three per year in large cities including Beijing and Shanghai

- Steve Finch

China’s government rarely times announcements by accident. A day after the Chinese New Year holiday, and exactly two weeks before the start of the country’s largest political meetings of the year—the “two sessions”—Beijing’s bureaucrats coined their latest policy term.

Within days, the city governments of Tianjin and Zhengzhou dutifully arranged meetings to discuss these new regulations, quickly followed by officials in other major cities. All hastily issued notices employing the new watchwords set to instruct China’s property market: liang jizhong, or the “two centralisations”.

The policy requires China’s 22 largest cities to hold just three land auctions each per year. It also requires them to publish timetables well in advance with details of the plots available in a bid to end panic buying by developers, which have driven up land prices and, in turn, the cost of owning a home in China.

Municipal governments are also required to increase the area of land available over time, thereby guaranteeing adequate supply.

A Chinese journalist compared the new policy to a formal meal at which diners would now be instructed to form an orderly queue, having been shown the menu well in advance. This would contrast with the previous system: a last-minute, all-you-can-eat buffet with limited and unpredictable supplies of everyone’s favourite dishes.