Yang Shen, former building official The government should use economic rather than administrative measures to exert macro-control over the real estate sector, according to a former senior official from the Ministry of Construction. 'We always use tangible forces - administrative means - to fight against intangible forces - the market. We should change that, otherwise we will move in the opposite direction of the macro-control target,' former ministry deputy director Yang Shen said. Mr Yang said that even though housing prices were high on the mainland 'it doesn't mean it is uncontrollable'. He said there were complex reasons for the high prices, including rapid urbanisation and fast economic growth, and the government's attempts to rein in prices were too simplistic. 'We can't use a single way or rely too much upon administrative means. Many officials are thinking as if it were the planned economy of the 1990s,' Mr Yang said. 'There really aren't any effective long-term mechanisms set up yet to tackle problems in the real estate sector.' He said some data about the sector was not correct and this had misled the market and policy makers, such as the scale of fixed-asset investment input into this sector. 'The government should be wise and understand which information to adopt.' He urged the government to release more land for property development, saying residential areas covered just 3 per cent of the country. 'With the expansion of land supply, prices will not go that high,' he said. Mr Yang said the government should also improve monitoring of capital entering the sector, especially foreign investment. He also urged the government to make loans more accessible to consumers, in part by lowering interest rates.
