China released the first central government policy document that indicated the waiver of residency restrictions in some smaller cities. It announced the concrete steps of China's policy reform on the household registration system. Announced last Wednesday by the Central Committee of the Communist Party, it moved that those living within urban residential populations of less than three million would be covered by the waiver.
Last Wednesday, the Central Committee of the Communist Party and the State Council announced that China would waive residency restrictions in some smaller cities in the country. The restriction included those household registrations within urban areas whose residential population is less than three million. In larger cities, on the other, the residency restriction would be lifted where the population exceeds three million but less than five million.
The said lenient policy was reportedly China's way of reforming its economic regulations to boost the social mobility of its labor workforce. It was also pegged to support economic growth and promote higher demands for homesteads in some cities to ease China's housing inventory pressures.
According to analysts, there would also be tax and fee cuts to improve China's GDP growth rate. However, the said cuts were perceived to reduce governmental revenue. Nonetheless, analysts believed that the moves would help the country flourish this year and yield a forecasted increase of 0.8 percent on its GDP growth. Chinas Finance Minister Liu Kin said last Wednesday that these policy reforms would help China generate more GDP and alleviate the labor and housing crisis.
In other news, The Business Times reported that China's reform to curb the financial risks associated with housing would include the tightening of lending to rental housing companies. The policy would also provide a 30 percent capping for the ratio of their rental income from bank loans acquired by tenants.
It was also mentioned that the Chinese government has been promoting its rental housing market in the last two years to provide affordable housing options across the country. However, the sector's rapid growth has urged the government to create policies to promote regulatory control associated with the financial risks in the rental housing market.
During which, the Ministry of Finance in China referred to the sector as 'chaotic' and that it has been haunted by false listing information and malicious practices. These discrepancies included the misuse of bank loans, illegal withholding of security deposits, and forced evictions. Thus, the government found that the leniency in policy for residential requirements would help reduce the problems through rentals.
