Official GDP growth data released by the National Bureau of Statistics of China

China Unveils Stimulus, Cuts Rates on $5.3 Trillion Mortgages, Cities Ease Homebuying Rules

Sep 29, 2024, 01:52 PM

China has introduced a series of significant stimulus measures aimed at boosting its slowing economy and shoring up its troubled property market. The People's Bank of China (PBOC) has cut key interest rates, including the reserve requirement ratio and policy interest rates, and has lowered mortgage rates for existing home loans, affecting as much as $5.3 trillion in mortgages. These steps are intended to inject liquidity into the economy, reduce borrowing costs, and stimulate growth. Major cities such as Shanghai, Guangzhou, and Shenzhen have eased homebuying rules, including lowering down payments, reducing the number of years required for non-local residents to purchase homes, and easing purchasing restrictions to revive the housing market. Shanghai will now levy a VAT on the sale of homes held for less than two years, down from the previous five years. The stock markets responded positively, with Chinese stock indexes rallying and the CSI 300 Index experiencing its biggest weekly gain in nearly 16 years. Economists are now more optimistic that China can achieve its growth target of around 5% for the year, although some analysts caution that more fiscal measures may be needed to sustain the recovery.