Ground-breaking policy shifts in China do not take place with one big, cathartic announcement or after a cliff-hanging vote. Instead, they evolve through a steady drip of leaks, hints, denials and oblique official statements – such as the 40-character notice last week by the State Council that it had approved plans gradually to reform the “real estate tax system”.
The real-world translation of this statement is probably: China will start to introduce some form of annual tax on residential property in the coming months. If that does happen – and it is still is an “if” – it would be one of the most important reforms Beijing has pioneered in years.
The immediate explanation for bringing in such a tax is to stifle property speculation, which many fear is feeding a bubble. New data released yesterday showed house prices were up 12.4 per cent over the year to May.