Editorial | Stabilising property sector is first step to economic recovery
- China’s new housing policies serve as a political statement that the economy is the priority and restoring domestic confidence is the key
Beijing has unveiled unprecedented, coordinated measures to stabilise China’s ailing property market. It says something about the depth of the housing downturn that these moves may be unlikely to reverse it overnight, or on their own.
But the priority is to rebuild positive sentiment in the economy generally. In that respect the timing of the announcement is important and sends a clear message.
It comes ahead of the third party plenum in July, where the Central Committee will set out the country’s general economic strategy for the next five to 10 years.
The new housing policies serve as a political statement that the economy is the priority and restoring domestic confidence is the key.
The leadership needs to strike a balance between stabilising the property market and overshooting, which could worsen the debt burden of local governments.
By the time the plenum comes around, the central government will be able to fine-tune the new measures to reflect reaction gathered by officials on nationwide fact-finding trips.