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There is no doubt that revenue from land sales has been the backbone of local government coffers. The annul fees rose from 500 billion yuan ($81.6 billion at current rates) in 2003 to 2.9 trillion yuan in 2010. The problems with this are obvious. There is a limit to the quantity of sellable land and violence in the expropriation process has been a frequent source of social unrest. In addition,chanel handbags, local governments' fiscal decisions are often made on the assumption that land prices will continue to appreciate. When property prices do not go up anymore,celine bag, the trading volume of land will drop and severely affect the spending ability of local governments. These problems are imminent,ghd hair straighteners, and solutions should not wait any longer.In the long run,Cheap True Religion Jeans, less income will limit the investments made by local governments,oakley sunglasses outlet, and in the short term it could result in half-finished projects begging for funding. This is a scenario the central government wants to prevent. The cause of this likely scenario is over-borrowing of local governments and the continuous spending spree on infrastructure. The authors are macro-economy analysts at Haitong Securities.
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