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SCMP Reporter

Commercial use of residential buildings will no longer be tolerated by the  Guangzhou government - a move threatening a third of the city's individually run stores with closure, local media reported.

Officials are adamant the move is needed to ensure the separation of residential and commercial areas, and to improve town planning.

'The separation of residential zones and commercial zones is the general trend of social development. It is the basic principle and goal of our regulatory framework,' Liu Zheng  , vice-director of the Guangzhou Rented Houses Regulation Office, was quoted as saying.

He said stores in residential areas created many problems for residents, including noise pollution and hygiene concerns.

Lower rents in residential areas had led to companies operating there   having an unfair advantage  over their counterparts paying market-level rents in commercial areas, he said.

However, the new policy has been greeted with alarm by the city's property agents.

Guangzhou Midland Realty renting manager Dai Yonghui  predicted the new policy could see the end of as many as a third of Guangzhou's individual stores, many of which operate in residential premises.

But Mr Liu said only a few thousand licensed private stores and offices would be displaced by the new policy.

He quoted figures from his office  showing that Guangzhou had almost 900,000 rented apartments by the end of June, with only a small proportion rented for stores or offices.

Mr Liu said the new policy was targeting the more than 100,000 unlicensed businesses  in Guangzhou. Some of them have existed for years.

Xu Liang , owner of the VOOM Cafeteria in a residential block in the city's Tianhe district, said he would probably have to close if the new policy was implemented.

'I won't consider reopening the cafeteria in another place if the government policies aren't stable,' he said.

The Guangzhou government announced a similar policy in 2000, but it only lasted two years.  In August 2002, it allowed some residential areas to accommodate commercial usage again. In May this year  commercial usage was banned again,  with stores and offices  given three months to move out.

The Guangzhou Individual and Private Businesses Association has urged the government to consider real circumstances  in addition to regulatory requirements.

It  said a large number of employees  would lose their jobs if higher costs in commercial zones were beyond the reach of business owners.

Mr Liu said the government would consider such issues. He denied  it had plans to offer compensation to business owners who were affected by the decision.



Guangzhou revives ban on stores in residential  buildings