China's Real Estate Control Policy Failures Of Governance Research

Amazing achievements have been achieved in the past three decades in Chinese real estate market. In the meantime, many problems emerge. The central government keeps changing its regulation policies with the changing of the market. These policies display tendencies of multi-dimension of objectives, diversity of instruments and greater management. Although the central government proposes regulation policies frequently, they don't achieve ideal success. After 2003, the central government proposes more policies with greater management, but some problems still exist such as unbalance of market between demand and supply and bubbles of housing prices. Thus it can be seen that the crux of property market is not the deficiency of policies but the invalidation of policies during management. Therefore, it is necessary to find out the reasons why those policies don't work in order to solve the problems existing in real estate market.This thesis begins with the aim to search out the reasons of policy failure. The author thinks about the beneficial involved in the real estate control so that role relations of the beneficial are clarified, and the author also analyzes the features of the beneficial in different situations. For the author of this thesis, there are three main reasons which result in invalidation of regulation policies in Chinese real estate market. The three reasons are as follows:First, as the agent, the local government issues challenge to the central government in the game of benefit in the system of separation of powers; Secondly, developers take advantage of the monopoly of information to quest for the collusion with the local government under the circumstance of asymmetric information; Thirdly, under the expectation of irrationality, the public adopt irrational decisions to challenge the developers in the game of housing prices.Focusing on the three main reasons, this thesis constructs correlative governance models to present an analysis by means of principal-agent theory, game theory and option-game theory. From the result of analysis, the key to manage the policies failure in real estate market is to incent and restrain the actions of local government, developers and the public. Based on the conclusion of analysis of the models, this thesis puts forward approaches to manage the policies failure in real estate market.For the author, it is vital to perfect the contractual governance of local government, strengthen regulation of developers and guide the demand of investment and consumption reasonably, which are effective measures to avoid the policy failure and promote blossoming development real estate market finally.