China stocks see sharp drop after home taxes announced

<p>The announcement of new home taxes in China saw stocks fall.</p>

Stocks in China were down yesterday (March 4th) following an announcement from the government that it is set to introduce new taxes for home sellers.

The Shanghai composite index fell 3.65 per cent to close at 2,273.40, while the Hang Seng Index dropped 1.5 per cent to 22,537.8 by the end of the day.

Patrick Chovanec, chief strategist at Silver Crest Asset Management in New York and a former professor at Tsinghua University in Beijing, told the New York Times that the Chinese government is determined to dampen the property market in the nation.

He said: "They go through cycles when they want to pump up the economy and then they want to cool it down. And this is what's happening again."

Mark Williams, an economist at Capital Economics, said in a research note that property controls in China ought to be relaxed. Developers completed 11 million properties last year

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