Yingjiang County encountered severe damage following an earthquake that shattered Yunnan Province in southwest China. This resulted in the collapse of many houses, as well as seven fatalities (and perhaps more). According to the China Earthquake Networks Center the epicenter was monitored at 24.7 degrees north latitude, 97.9 degrees east longitude.
This can’t be good news when the country is attempting (successfully right now) to reduce property prices “with sales volume already falling following purchase restrictions by local governments.” The attempt is to make housing more affordable for the Chinese. But with this earthquake home prices are more likely to rise again, undoing all the good work of the local governments.
Wen Jiabao’s Work for Nothing?
It makes one feel bad for the Chinese premier. Poor Wen Jiabao has been so resilient in his efforts to “’resolutely’ press ahead with controls on the property market…reiterating a pledge to keep housing affordable.” As well, the government has pledge to take drastic actions on any irregularities that occur in the property market vis-à-vis tax and credit policies, forcing officials to become accountable for home price maintenance.
What the country should really do is to gradually increase interest rates but this should just be one piece in the puzzle of trying to control inflation. Inflation is also impacted by escalating worldwide prices of raw materials and this has to be accounted for as well.