Shanghai hopes to encourage foreign companies to raise capital through stock and bond issuance in Shanghai this year, Mayor Han Zheng said on Sunday, while also confirming the city plans a trial property tax during 2011.
Han said Shanghai aims to launch more cross-border financial services this year to support the central government's policy to promote the use of the yuan in cross-border trade settlements.
We will attract bond issuance and public listing of well-established overseas companies, Han said in his annual work report to the Shanghai Municipal People's congress.
Shanghai will support the launch of such new products as cross-border ETFs, income bonds, oil and lead futures, said Han. The city also plans to establish an insurance exchange this year, he said, without providing details.
China aims to build Shanghai, its financial capital, into an international financial centre able to compete with New York and London.
As part of efforts to further liberalise China's capital markets, Shanghai has long said it will allow foreign companies to sell shares on its stock exchange.
Fang Xinghai, Director-General of the Shanghai Financial Services Office, said late last year he hoped the country will start letting foreign companies sell shares in Shanghai in 2011, with approval processes for such listings to be made relatively simple.
More than two dozen companies, including HSBC and NYSE Euronext, have said they will seek a listing on the Shanghai Stock Exchange when the so-called international board is launched.
Han said one of the city's main tasks this year is to prepare for the trial run of a property tax to curb speculative investments in the real estate sector.
We will step up macro-control measures, prioritize the supply of non-luxury residential units to be owned and occupied by ordinary citizens, and prepare for the trial reform on property tax as required by the central government, he said.
Shanghai will join southwestern Chongqing city, which has said it was planning a property tax on luxury homes to combat stubbornly high property prices.
Housing prices in major Chinese cities surged by more than a fifth in 2010, according to the China Real Estate Index System (CREIS), run by Soufun, China's biggest online real estate company.
But some developers believe a property tax will have limited impact on property prices as it will not change the severe supply shortage and strong demand in China's property market.
In Beijing, Mayor Guo Jinlong said at the municipal parliament session on Sunday that the local government would aim to reduce soaring housing prices as well as severe traffic congestion, the Xinhua news agency reported.
We are under heavy pressure to stabilize housing and other retail prices, and optimize investment structure, now that a comparatively high proportion of investment goes to the real estate sector, Guo said in his government work report.
Last April, the central government stepped up tightening measures in the real estate sector as skyrocketing housing prices stoked public discontent.
The government has shut down several funding channels for developers, raised the minimum down payments for mortgages and capped the number of houses an individual can purchase.
Shanghai's property market has seen transactions and prices rising in recent weeks as sellers and buyers rush to complete deals before a property tax.