ABSTRACT
This chapter highlights the symbiotic yet conflicting relationship between the central and subnational governments and how the collective behaviour enforce the central government to implement relevant property policies one by one since 2009. It tries to define the institutional environment in China, an environment which revolves around the central government's policy of Gross domestic product (GDP) targets, land financing, subsidized loans and stimulation of inter-regional competition, and the impact these institutional guidelines have on regional real-estate development. The chapter explores how the latest control measures introduced by the central government do not directly or intentionally address the issues raised by the institutional environment. The five new measures introduced in February 2013 were designed to enhance regulation of property market. An observation about the Chinese economic transformation is that not only has the net worth of Chinese households expanded over the last decade as property prices have increased, but the net worth of the older generation has also continued to increase.
