China’s top leaders have pledged to make timely adjustments to policies in the struggling property sector and prioritize stable employment. They also made promises to boost domestic consumption, address local debt risks, and implement a counter-cyclical policy. The Communist Party’s Politburo, chaired by President Xi Jinping, stated that the economy is facing challenges and risks due to insufficient domestic demand, operational difficulties in some enterprises, and a complex external environment. The post-pandemic economic recovery is expected to be wave-like and tortuous. The meeting is expected to set the tone for China’s economic policies for the second half of the year and provide guidance on policy support for slowing growth. While the government pledged to stabilize growth, it fell short of offering extensive stimulus measures, indicating a focus on quality growth. The news of the meeting had a positive impact on Hong Kong and mainland China stock markets, with the property sector seeing strong gains. The government’s language on the real estate sector shifted to adjusting to changes in demand-supply dynamics and revitalizing idle properties, as opposed to emphasizing housing as a means of living rather than speculation. The government also expressed the need to prevent and resolve local debt risks and strengthen financial supervision. Additionally, China’s leaders plan to activate capital markets, boost investor confidence, stabilize the renminbi exchange rate, and increase government investment. They also aim to expand domestic demand, raise income levels, and boost consumption in various sectors, including automobiles, electronics, and household goods and services.
China commits to improving property policy during challenging economic recovery
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