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China’s rush to prop up housing sector aims to boost confidence ahead of third plenum: analysts
- Coordinated steps from Beijing include billions of yuan in central bank funding, eased mortgage rules, and government purchase of unsold inventory
- Measures show desire ‘to put a floor under the property slump’ before third plenum, but focus certain to be on industrial policy, observer says
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China’s “unprecedented” flurry of moves to stabilise its property sector shows the leadership is determined to restore confidence in the economy ahead of a key policy-setting meeting, where “new productive forces” are likely to be in focus, analysts said.
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Beijing announced coordinated steps on Friday to address the property sector downturn, with the central bank handing out billions of yuan in extra funding and easing mortgage rules, and local governments encouraged to buy some unsold homes.
The raft of support measures, described as “the boldest” or even “unprecedented” in a decade by many observers, followed inspection tours around the nation by several members of the Politburo Standing Committee, the top decision-making body of the ruling Communist Party.
The traditional field trips came in the lead-up to the party’s third plenary session in July, where its top policymaking body – the Central Committee – will set out the country’s general economic strategy for the next five to 10 years.
“The new measures certainly show that the authorities want to put a floor under the property slump, at least for the time being,” said George Magnus, a research associate at Oxford University’s China Centre.
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Vice-premier He Lifeng, who inspected the troubled property sector of Zhengzhou in central Henan province, reiterated how the health of the property market was linked to social wellness and economic development.
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