Demand recovery should come first

It is expected that Chinese authorities will view the recovery of demand as a top priority this year in order to support stable economic growth. Economists and experts have indicated that additional loosening of macroeconomic policies as well as adjustments to property market regulations are also required. The remarks coincide with the focus shifting to how China will formulate important economic goals and strategies to propel the second-largest economy in the world through domestic and international obstacles when the nation’s top legislative body and top political advisory body convene early next month for their yearly two sessions. as of January.

With the year-over-year increase of China’s consumer price index, a key indicator of inflation, staying negative for four consecutive months for the first time since 2009 as of January, experts emphasized the lack of demand as the most pressing and notable issue that demands policymakers’ attention. Chief economist at BOC International Xu Gao stated, “The main challenge facing the Chinese economy is insufficient demand, as well as the resultant weakening of expectations, with the subdued housing sector the main reason for the situation.” According to Xu, increasing demand should be considered a crucial strategy for stabilizing economic growth. He also mentioned the need to precisely target property sector support policies to address the financing challenges faced by real estate developers.

In order to lessen the credit risks that property developers face, he proposed that the nation set aside special relief funds for the real estate sector totaling between 1 trillion and 2 trillion yuan ($138.9 billion). He also mentioned that if the credit risks of developers are not effectively reduced, more real estate projects may face financing and delivery issues. According to data released by the National Bureau of Statistics, the prices of newly constructed residential properties decreased in January compared to December in 56 out of 70 big to medium-sized Chinese cities. This is a decrease from 62 cities in December.