Chinese authorities have outlined fresh curbs in relation to burial sites, proposing rules on aspects such as limiting the grave area, the height of tombstones, the use period, price, etc.
The surprise move sent shares of Fu Shou Yuan International Group (01448.HK), the mainland’s largest provider of funeral services, tumbling as much as 23 percent on Monday.
Like other policy initiatives, the move may be well-intended but it may not really improve the access and affordability of burial places to the poor.
Over the years, there has been plenty of government meddling in people’s lives as authorities often get overzealous in relation to their perceived social duties.
For instance, just when many multinational firms are mulling the idea of moving their production lines out of China amid an escalating US-China trade war, Chinese authorities announced that they would overhaul the social security policy from January 1 next year.
It’s estimated that the new measure would add an extra 2.4 trillion yuan cost for the corporate sector and erode 10 percent of their profit, according to Morgan Stanley.
Such a poorly timed move could cost lots of jobs.
Meanwhile, despite a string of stringent measures, home prices continue to stay high.
Authorities have hinted that they are giving serious thought to a property tax in order to cool the housing market.
Now, if they decide to go ahead with the new tax, and if at the same time the US-China trade spat worsens further, there could be a huge price to pay in economic terms.
China’s population policy is also notorious. Beijing took a policy U-turn to encourage couples to have more babies, putting an end to the nation’s decades-long one-child policy in 2016.
However, more Chinese young couples are opting to be DINK (Double Income No Kids) for numerous reasons, such as the rising costs of living and expensive home prices.
Instead of helping people resolve the financial issues and make it easier for couples to raise kids, some Chinese academics have suggested that childless people or parents of just one child should be made to pay extra tax.
Too much regulation can backfire, as shown in the runaway home prices and rentals. It’s time for mainland officials to rethink their approach and refrain from over-intervention with excessive rules.
This article appeared in the Hong Kong Economic Journal on Sept 11
Translation by Julie Zhu
[Chinese version 中文版]
– Contact us at [email protected]