* China- VAT on property enterprises

China – The Chinese State Tax Bureau announced it will impose
VAT on property enterprises. The main point is that the tax
will change from “pre-levy on estimation” to “case by case levy
on actual gain”. It is thought this will impose a real burden on
the developers, hence the fall in the sector today.

This follows the announcement last week by the banking
regulator that banks must cease any lending to finance
households buying shares, and the move to stop new mutual funds.

The central bank is draining liquidity at record levels as it
finally appears that China is trying to tackle some of its
bubbles. This could have another whack on commodities etc.