Housing adjustment structure

The transfer of land, does not create value, but the land as a carrier to achieve wealth from the land buyers to the land sale of the assignee. The real estate industry in China's rapid development in the past more than 10 years, but also China's wealth from the residential sector to the large-scale transfer of government departments Wang Qing/wen "Twelve-Five" plan to focus on "structure", the focus is to encourage consumption, expand domestic demand, so as to escape economic growth on investment and export over-reliance. The author thinks that the particularity of China's real estate market is one of the most important reasons for "high investment and low consumption".　　And the Social Security housing plan is the key to solve this contradiction. The various means of stimulating consumption can be summed up in two categories: raising the income of residents and reducing the savings rate of residents.　　The author thinks that the Social Security housing plan has a far-reaching influence on reducing the savings rate and stimulating the consumption of residents. High house prices are an important reason for the high savings rate of Chinese residents.　　In the current Chinese cities, People's daily consumption, education, medical expenses, once and buy a house comparison, I am afraid it is nothing. Saving to buy a house is probably the most important motivation for the current Chinese population, especially the 25-year-old-40-year-old working population to save.　　If house prices are rising faster than rising incomes, their savings rates may have to rise further with house prices for those who want to buy homes. China's high prices are the root cause of high land price, which has become a consensus.　　The biggest beneficiary of the Highland Price is the land transferor, the local government. The transfer of land, does not create value, but the land as a carrier to achieve wealth from the land buyers to the land sale of the assignee.　　From this point of view, the real estate industry in China's rapid development in the past more than 10 years, but also China's wealth from the residential sector to the government sector large-scale transfer process. In this process of wealth transfer, real estate developers are at best an intermediary.　　They, like any other intermediary, are just Maur, taking part in the chain of interest. The transfer of wealth from the family sector to the public sector will have an impact directly on the behavior of the economic subjects. As the average consumption propensity of the family sector is higher than that of the public sector, and the average investment tendency in the public sector is higher than that in the household sector, the redistribution of wealth in both sectors will naturally result in stimulating investment and curbing consumption.　　The author believes that this is the most important reason why China's investment in GDP has risen rapidly in the past ten years, while consumption has fallen rapidly in proportion to GDP. On this issue, China's experience differs from that of other emerging market economies. Imagine that if land resources are not monopolized by the government but are owned by other bodies in the family sector, the transfer of wealth generated by the rapid development of the real estate industry will occur between different subjects in the family sector, rather than between the family sector and the public sector. In this way, if the family sector is seen as a whole, its wealth has not diminished.　　Thus, the overall consumption level of the household sector will not be inhibited. Based on the above analysis, in order to effectively realize the target of "adjusting structure and stimulating consumption", we need to change the current unfavorable consumptionWealth distribution patterns, or at least prevent them from getting worse. The Social Security Housing Program is a realistic and viable policy option in this direction. In essence, the low price of social security housing is due to low land prices.　　Local governments offer land at low prices for social security housing, essentially "returning wealth to the people", and the process by which money returns to the family sector from the public sector.　　At the same time, if the Social Security housing program can bring about an increase in the overall real estate supply, it will help curb the current overall housing prices too fast, and stabilize the expectations of future housing prices, to a certain extent, weaken the savings motives of the resident sector, conducive to encouraging consumption. China in the next 3 years-5 years, "restructuring, stimulating consumption" can achieve breakthrough progress, Social Security Housing program success or failure is the key. Many analysts suggest that China, like many more developed countries, should set up sound social security systems to reduce household savings rates to stimulate consumption.　　I disagree. The highly developed social security system established in developed countries has effectively reduced the propensity for savings and mobilized consumption. However, social security systems that "effectively reduce private savings rates" are based on overly optimistic demographic and economic growth assumptions. Practice has proved that the population aging and economic growth rate inevitably slowed down, so that the social security system in developed countries is unsustainable in the long run, and the public finance has brought huge financial burden.　　Such a social security system, which is essentially a mechanism for intergenerational transfers of income, can only stimulate the consumption of the generation who benefit from the social security system, not only to benefit the future generation, but to reduce the potential for future generations by increasing the financial burden. In view of the drawbacks of the existing social security system, the direction of current countries ' reform is to "make real personal account", namely, from "intergenerational income transfer" to "individual compulsory saving" mode.　　However, in view of the high voluntary savings propensity of Chinese residents, the social security model characterized by "making real personal account" does not reduce the average savings rate of residents, and thus can not play an effective role in stimulating consumption. While China needs a social security system, its main aim should be to limit the establishment of a social insurance system designed to reduce the destructive effects of small probabilities and unforeseen adverse events on the insured. Reducing the savings rate and stimulating private consumption should not be the main objective of the social security system. The writer is chief economist of Morgan Stanley Greater China