Housing price rises in China are expected to slightly fall in the fourth quarter of this year as price hikes and reduced lending may curb property purchases, the nations top think tank said in a report issued Monday. Volume of property sales may decline in the fourth quarter, but investments in the real estate market will keep growing, the Chinese Academy of Social Sciences (CASS) said in the report. The report did not distinguish between new home prices and second-hand house prices. October saw property prices in 70 medium and large cities rise 3.9 percent from a year earlier and 0.7 percent from September, according to data from the National Bureau of Statistics last week. New home prices climbed 0.9 percent in October from September, 0.1 percentage points higher than the growth rate in September. However, growth rate of second-hand house prices eased in October. Second home prices rose 0.4 percent month-on-month in October, but the growth rate was 0.1 percentage points down from that in September. Prices of second-hand houses in some major cities started to fall. For instance, average price of second-hand houses stood at 11,920 yuan ($1,745.6) per sq m in October, down 1.65 percent from September, according to the municipal bureau of statistics. Housing prices returned to growth on month-on-month basis in March on record lending and helped the governments favorable policies to stimulate property consumption, including tax breaks and interest rates cuts. Chinese banks extended 8.92 trillion yuan of loans in the first 10 months, 5.26 trillion yuan more than the same period of last year, after the government scraped lending restrictions for banks last year to accelerate investment. However, the record lending triggered concerns of assets bubbles and pushed up housing prices beyond the level of affordability for many. Speculation was the main reason behind the current price hikes, said the report. The real problem was that financial institutions did not strictly implement favorable policies, which spurred excessive demand and speculation, said Ni Pengfei, researcher with the Institute of Finance and Trade Economics of the CASS. The government has not adopted forceful measures to curb speculation and may take further steps to spur housing consumption as the economic recovery was still largely dependent on property market, said the report. Government data showed that the countrys real estate sector accounted for more than 20 percent of urban fixed-asset investments, a key driver of Chinas economic recovery. The report forecast that property prices would stabilize in the first quarter of 2010, rise on expectations of inflation in the second quarter, and stabilize or slightly dip in the third and fourth quarters. The property market is not likely to see drastic increases in supply or promotions with discounts in the short term as property developers had sufficient funds at hand because of the loose monetary policy and earnings from sales this year, the report said. The countrys property developers reaped impressive sales revenue on rising prices. China Vanke Co, the countrys largest property developer by market value, posted a 35.2 percent jump from a year ago in sales revenue to 52.69 billion yuan in the first 10 months. China is also expected to face rising expectations of inflation in the first two months of 2010, which would further boost the property market, Ni Pengfei said. Related readings:  House prices rise at fastest rate for 14 months  Group housing project abandoned  Check zooming property prices  Chinas housing prices rise 2.8% in September Historical data showed the first quarter credit accounted for more than 60 percent of the years total. Chinas long-term urbanization trend has lay a solid foundation for the property market, while housing affordability remains a concern for many ordinary Chinese, said Ni Pengfei, a researcher at the CASS. China should continue to carry on its stimulus policies in place, while fine-tuning its economic policies so that it can benefit the ordinary citizens who are trying to buy homes without speculative intents. China has been increasing government-backed expenditure on fixed-asset investment to spur economic growth. But the investments from the private capital should be greatly increased in China while gradually declining the government-led investments, according to the report. China economy should change the emphasis from expansion in terms of size in 2010 to structural adjustments while continuing to carry on the stimulus plan, said Pei Changhong, head of the Institute of Finance and Trade Economics, CASS. The report suggested China continue to implement active fiscal policy, appropriately adjusting the patterns of budgetary expenditures and incomes. China needs fine-tune moderately loose monetary policy based on the changing economic situations. The report is first green book of its kind published in China. Green book is a type of report published by government sectors carrying suggestions waiting to be accepted by the government. (For more biz stories, please visit Industries) Alexander Edler Jersey Finals MIAMI- In the NBA, the best defenses live by a few principles. You've got to control the paint, nothing easy. You've got to close out on shooters as best you can. You've got to take advantage of opportunities to attack the ball while playing consistent position. And you've got to be willing to live with something. Some type of shot has to be what you're willing to surrender. The Celtics and Spurs, the two great defenses of the last decade, along with the newest model in Chicago, are built on this concept. Eventually you have to be willing to surrender some type of shot. Most often it's the mid-range jumper from one of the bigs, or the corner three as the last rotation, sometimes it's the guard driving off the pick and roll free as the double hedges on a star screener with range (read: Dirk, as both the Thunder and Lakers let the ball-handler roam free off the pick and roll to guard Dirk). You can't guard everything, all the time Ray Bourque Jersey .2011 NBA Mock Draft: Checking In On Klay Thompson's Stock his lack of a dominant first step, but DraftExpress rightly observes that Thompson is so good at positioning his body and catching the ball in the right spots that he's often able to generate an advantage over defenders without that so-called "elite athleticism": Finals Mats Sundin Jersey .2011 NBA Mock Draft: Checking In On Klay Thompson's Stock his lack of a dominant first step, but DraftExpress rightly observes that Thompson is so good at positioning his body and catching the ball in the right spots that he's often able to generate an advantage over defenders without that so-called "elite athleticism": Manny Malhotra Finals Jersey In several ways, the initial statement of the new Pan American Western Petroleum Company is significant to followers of the stock market and those interested in the oil industry. The fortunes of the company, immediately following the decision to segregate the properties of the Pan American Petroleum and Transport Company, have been beset by manifold obstacles, but yesterday's statement of eight months' operations seems to proclaim a decisive victory for the company and a personal triumph for Mr. Doheny Daniel Sedin Jersey Stamkos answered questions with a strip of black tape trying to cover whatever measures the Tampa Bay Lightning training staff used to close the wound on the bridge of his nose after he took a puck off his visor in the second period. He returned later in the period and played the rest of Game 7 with a full cage on his helmet. The US congress will hold a hearing today to judge whether China has revaluated its currency to its requirement. On June 19, 2010, the Peoples Bank of China (PBOC) announced a policy re-pegging the yuan to a basket of currencies. But the Americans, eager to see a faster increase in the value of the Chinese currency, dont seem to be happy with the slow revaluation. Hence, they are pressuring China again to revaluate the yuan faster. The new wave of pressure is no more than an effort to make China the scapegoat for Americas poor economic performance. The fact is, even a 20 percent increase in the yuans value, as some prominent American scholars have demanded, will not help the US economy greatly. According to a recent joint study of American and Chinese scholars, who used a computational general equilibrium model covering the major economies, a 20 percent rise of the yuan against the US dollar will increase American employment only marginally (0.16 percent). And it will raise American consumption by a mere 0.2 percent and GDP growth by just 0.16 percent. In contrast, it will worsen American trade balance by $10.5 billion, because the substitution effect between Chinese exports and US-made goods is very weak. But a 20 percent rise in the yuans value will hurt the Chinese economy severely. Although the trade balance will be only marginally affected, dropping by $10.4 billion, which is a small fraction of Chinas total trade surplus, its employment and domestic consumption will fall by 3.03 percent each and its GDP will drop by 3.18 percent. So, it does not make much sense for the US to demand a large revaluation of the yuan unless it just wants to punish China. And if that is the case, it is perfectly reasonable for Chinese policymakers to firmly reject the American demand. The same study has also found that a gradual revaluation of the yuan does not harm the Chinese economy greatly. For example, if the yuan rises by 5 percent against the greenback, employment and consumption in China will drop by only 0.74 percent and 0.57 percent, and its GDP will decline by 0.56 percent. Plus, the trade balance will improve by $3.47 billion. Besides, a moderate revaluation of the yuan will bring sizable benefits to China, the most significant being lower inflationary pressure, including those of higher asset and real estate prices. One of the fundamental laws governing a countrys catch-up process is the so-called Balassa-Samuelson effect. Worked out independently by Hungarian economist Bela Balassa and American economist Paul Samuelson in the early 1960s, it says (roughly) that a countrys currency will experience real revaluation when it catches up with advanced countries in terms of per capita income. So, a real revaluation of the yuan should make Chinese goods and assets more expensive for people abroad to buy. This means either a more expensive yuan, that is, revaluation of the yuan, or higher prices of Chinese goods and assets, that is, inflation and assetreal estate bubbles. Inflation and assetreal estate bubbles benefit no one. But the yuans revaluation at least increases Chinese peoples purchasing power when it comes to buying foreign goods and services. Therefore, to tackle the Balassa-Samuelson effect, China would do better to choose the yuans revaluation over inflation. PBOCs sterilizing bonds help ease inflationary pressures while maintaining a stable value of the yuan. But this entails forced savings, especially when the economy is on an expansionary path and banks prefer lending to the real economy to buying the sterilizing bonds. The forced savings become part of Chinas current account surplus and ultimately show up in its official foreign reserves. This would create a vicious circle: PBOC issues sterilizing bonds to stabilize the yuans value, leading to more accumulation of foreign reserves, which requires the yuan to rise further in value, which in turn prompts PBOC to issue more sterilizing bonds. The only way to break this vicious circle is to allow the yuan to revaluate. Given the competitiveness of Chinese products in the world market, moderate revaluations are unlikely to worsen Chinas position. Chinese workers are paid only one-fourteenth of what Japanese workers get and one twelfth of what South Korean workers receive. Moreover, labor productivity increases much faster than wages. One worker today is as productive as 12 workers were 20 years ago, but hisher salary is only 4.7 times of what hisher predecessor got two decades ago. Double dip unlikely Related readings: Yuan at new peak against dollar China Economy by Numbers - AugustThe cost of labor per unit of output has declined and the competitiveness of Chinese exports improved. Assuming that the unit labor cost did not change in other countries, the gap between productivity growth and wage growth in China would have allowed the yuan to rise 4.3 percent in real terms each year without lowering Chinas competitiveness in the last 20 years. And since in reality, the unit labor cost has increased in many countries, the room for the yuans revaluation would have been larger. The distress tests Chinese exporters have undergone reflect only their wishes, not reality. Experienced exporters factor in the risk of the yuans rise when they sign contracts with foreign buyers. Between 2005 and 2008, the yuan rose more than 5 percent each year, during which Chinas exports actually doubled. In the first half of 2010, exports grew by 42 percent taking the total export volume back to the pre-global financial crisis level. Inflationary pressures are back, and real estate prices are rising despite concerted government efforts to control them. Allowing a larger band for the yuans value to rise will help the government deal with inflation and real estate prices, because a more flexible exchange rate - not a passive response to foreign pressure - is in Chinas own interest. The author is a professor and director of the China Center for Economic Research, Peking University.   ' ' '