Chinese city in u-turn on easing property grip

A Southern Chinese city that rolled back property-purchase restrictions on Tuesday reversed course just hours later, signaling that the country's top leadership remains determined to keep a tight grip on the overheated sector.

The quick local policy U-turn by Foshan, a city of about seven million people in the Southern province of Guangdong, indicated that Beijing hadn't given its blessing to the modest rollback in curbs announced earlier Tuesday. That dashed hopes among some property developers and observers that a weakening economic outlook may force China to loosen real-estate tightening measures in the coming months.

Still, shares of a number of Chinese property developers rose on Wednesday on hopes that Foshan's move indicates local authorities are putting pressure on the central government to relax the restrictions. Local governments reap much of their revenue from land sales.

In a statement posted on its website late Tuesday, Foshan's housing bureau said it has postponed the easing of property-tightening measures that it had announced earlier in the day. It will seek further public opinion and to make a comprehensive assessment on the effects of such measures, the bureau said, without giving further details. 

Source: WSJ.com