China has devised a new way of preventing money from flowing abroad: by curbing home property sales.
This past weekend, seven provincial capitals and Chongqing, a centrally-controlled municipality, banned homeowners and investors from selling their property.
Shijiazhuang, capital of Hebei Province, has banned investors from selling newly bought homes for up to five years, while Changsha, capital of Hunan Province, has barred homeowners from buying a second property for up to three years from the time of their first home purchase, according to state mouthpiece Xinhua News Agency.
Changsha has also limited property sales to non-local residents to one unit per person.
Several major cities began implementing such restrictions earlier in the year. Now a total of 41 cities have limited home sales.
Sensing the political instability of the regime, the moneyed elite of China have continually transferred their wealth abroad. By stopping people from selling their homes, the regime ensures that they and their capital stay put, noted China current affairs commentator Zhao Pei.
Zhao also believes this measure is the regime’s attempt at creating stability. “If people begin to sell their property, the money will enter circulation and potentially cause inflation and prices to go up,” he said.
Additional reporting by Reuters and New Tang Dynasty Television.