SHANGHAI—China's central Henan province appears to have beaten a hasty retreat on a proposal to ease housing-market curbs in an about-face reminiscent of several earlier episodes across the country, illustrating continued tensions between Beijing and local governments over property policies.
The move pulls back an attempt to help first-time home buyers in the province with discounted loans.
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A construction site for a residential complex in Wuhu
In a quick and chaotic reversal, Henan's provincial government Wednesday removed a newspaper report it had posted on its website two days earlier, outlining how it directed banks to extend loans at rates of as much as 30% below the benchmark lending rate for first-home buyers.
Such cat-and-mouse games between the local governments and the central government have been commonplace since China rolled out its property tightening campaign two years ago, which includes higher down-payment requirements and outright bans on purchases of second and third homes in some areas.
Local authorities didn't put the actual directives online, but posted the newspaper report in its entirety, an indication of caution pending the central government's response.
When asked for comment, an official from the Henan government's information office referred to a report by a different newspaper, the 21st Century Business Herald, which cited an unnamed source from the Henan office of China's banking regulator as saying that the easing measures weren't in line with the central government's policy.
The official recited the headline of the report—"Henan Housing Loan Policy Cancelled; Official Says Policy Was Mistakenly Passed On"—but declined to say more.
Henan faces huge pressure from slowing economic growth, and the relevant authorities might have hoped to accelerate growth through the real-estate sector, the newspaper cited the unnamed official as saying.
Henan's policy proposal was sent to different departments of the banking regulator over the past two weeks but was then revoked, according to the newspaper.
The Henan branches of Bank of China Ltd. and Industrial & Commercial Bank of China said they weren't offering home-loan discounts.
Calls to the Henan branch of the country's banking regulatory agency, which was cited by the 21st Century Business Herald, weren't answered. Officials at China's central Ministry of Housing and Urban Development couldn't be reached for comment.
As China's economic growth weakens, the central government has been slightly more tolerant of local authorities' policies aimed at propping up the real-estate market, particularly if the policies try to meet "real" demand from first-home buyers and appear designed to exclude speculators.
Local governments, dependent on land and property sales for much of their revenue, have devised a raft of policies to spur sales, offering tax concessions and more lenient residency rules for out-of-town buyers.
But while cities have been able to get away with introducing tax concessions, Beijing has rejected a number of local authorities' adjustments to the tightening measures that directly contravene the central government's policies, particularly in regard to the limits on home purchases.
In October, Foshan in Guangdong province had its wrist slapped when it proposed easing curbs on the number of homes a buyer could purchase, while in February, Wuhu in Anhui province also had to reverse a move to provide subsidies for home purchases. Earlier this month, local media reported Beijing had rejected a plan from Shijiazhuang in Hebei province to ease limits on the number of homes a family could buy.
China, Henan province, Henan, newspaper report, Industrial & Commercial Bank of China, local authorities, central government, Beijing, government
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