China Politburo Says It Will Allow Property Market to Better Meet Reasonable Home Demand

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The ruling Communist Party’s top decision-making body said on Monday that China will increase affordable housing construction and support the commercial real estate market to better meet reasonable demand from home buyers.

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In a meeting chaired by Chinese President Xi Jinping, the Politburo said it would promote healthy growth and a positive cycle of the country’s real estate sector, according to the state-run Xinhua News Agency.

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The meeting did not offer further details of the asset policy, which has been in the limelight for the market after Chinese officials last week bid to help indebted China Evergrande Group deal with its crisis.

The Politburo meeting also dropped mention of its rhetoric – housing is for living, not speculation – which was used by President Xi and later at all levels to show the government’s stance regarding the property sector. was reiterated by government bodies.

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“The meeting indicates that the government may loosen policies in the asset sector,” Zhiwei Zhang, an economist at Pinpoint Asset Management, said in a note on Monday.

Some analysts have recently speculated that Beijing will shift its policy to be more supportive of economic growth, as a fall in assets and a Covid-19 resurgence put more pressure on the country’s growth.

China’s central bank said on Monday it would reduce banks’ reserve requirement ratios by 0.5 percent while releasing 1.2 trillion yuan ($188.3 billion) of liquidity to the financial sector.

The Politburo said at Monday’s meeting that the government would welcome the party’s Congress hold on to keep the economy running at a reasonable pace next year. The meeting also called for expanding effective investment and helping consumption continue to improve in 2022.

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