China’s Housing Minister Set to Announce Key Reforms
The wait is almost over for investors eagerly anticipating China’s next move to stimulate its slowing economy and struggling property sector. Tomorrow, China’s Minister of Housing and Urban-Rural Development, Ni Hong, will hold a press conference to discuss promoting the steady and healthy development of the property market.
A Series of High-Level Briefings
This event marks the latest in a series of high-level economic policy briefings, which started late September. The briefings aim to address concerns over China’s slowing economic growth and its struggling property sector. Investors have seen recent stimulus announcements as a signal that Beijing is finally stepping in to stimulate growth.
Recent Stimulus Announcements
Over the weekend, officials from China’s Ministry of Finance announced that they would allow local governments to issue more special bonds for land purchases and allow affordable housing subsidies to be used for existing housing inventory, instead of only new construction. This news sent Chinese property stocks soaring on Monday, with the Hang Seng Mainland Properties Index rising over 2%.
Market Volatility
Throughout the week, Chinese stocks have been volatile as investors diverged in their opinions on whether the government would deliver the stimulus needed to boost the economy. Ahead of the press conference, the market rallied again, indicating some hope that China would soon deliver concrete stimulus policies.
Analysts’ Expectations
However, not all analysts are convinced that Thursday’s briefing will bring significant policy surprises. Bruce Pang, chief economist and head of research of Greater China at JLL, believes that policymakers are taking a more pragmatic stance on the property sector, expecting it to be neither a driver nor a dragger of economic growth, but a stabilizer going forward.
Previous Stimulus Measures
In late September, the People’s Bank of China governor announced a 50 basis-point cut to the reserve requirement ratio, and lowered the minimum down payment for second-home loans nationwide from 25 percent to 15 percent. Days later, officials pledged to “halt the real estate market decline and spur a stable recovery” in a top-level meeting chaired by Chinese president Xi Jinping.
Stay tuned for updates on this developing story!
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