Yearender: Predictions for 2016 through 20 questions
Updated: 2015-12-31 07:53
7. Will China's real estate see a rapid recovery?
Zhao Xiao, a professor of economics at the University of Science and Technology Beijing
No. I don't think China's real estate market will recover next year. Instead, its condition could worsen than this year.
Although China's overall real estate sales improved this year compared with that of last year, property developers are still very cautious. Major real estate indicators such as purchase of land, new investment in the property sector and newly built houses all show poor performance. So I am not optimistic about overall property sales next year.
Every index shows that China's real estate industry is reaching a historical turning point, which is the trend of the market. The major market moves next year will be big real estate developers acquiring small companies, rather than investing in new land and new housing construction. I suppose next year there will be zero growth in real estate investment for the first time.
Real estate destocking will face huge pressure next year. Currently, there are 696 million square meters of unsold housing and more than 7 billion square meters of housing under construction nationwide, which could need five to eight years for them to be sold.
The central government has launched a series of favorable policies for real estate destocking. The orientation of the policies is good, but whether they will be conducive to destocking depends on how they are implemented.
8. Will more effective measures be taken to ease air pollution in China?
Zhou Dadi, vice-director of and senior researcher at China Energy Research Society
That depends. Actually, the authorities and researchers have already realized what measures could be effective. The issue now is how to implement them.
These measures include, most importantly, adjusting the economic structure. For example, steel production needs to be reduced. But the move will hurt steel plants, and whether it can be implemented will test the leadership's determination to fight air pollution despite the opposition of interest groups.
Another necessary measure is to optimize energy supply. China still relies on coal as its main energy source, which cannot be fundamentally changed in a few years, let alone 2016. But in the new year, we can at least increase the supply of natural gas to replace some of the coal used to generate energy, which, in turn, would raise heating charges in winter and increase the operation costs of enterprises. The government, therefore, needs transparent discussions to persuade the public.
In particular, for metropolises such as Beijing, there might be a stricter limit on the use of cars. At present, Beijing residents cannot drive their cars one day a week. This restriction could be tightened next year, and people might be prevented from driving their cars, for example, on weekdays, because vehicle emissions are one of the key sources of air pollution. Of course, the authorities need public discussions so as to convince residents about the necessity of such a move.
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