Chinese stocks had their worst day of 2012 after Premier Wen Jiabao said the government would maintain its crackdown on property speculation because house prices were still too high.
Many investors have been banking on an imminent relaxation in Beijing’s two-year property tightening campaign, but Premier Wen cast doubt on those expectations. In unusually blunt language, his comments seemed calculated to deliver a stern rebuke to real estate developers and local officials who have been increasingly vocal in calling for a policy relaxation.
“I can clearly tell everyone now. Housing prices are still far, far from returning to a reasonable level. So we cannot relax the policy controls. If we relax them, it will be a waste of our efforts and the market will be thrown into chaos,” he said in a news conference at the end of China’s annual parliamentary meeting.