Chinese policymakers have stepped up their efforts to support the economy and sliding markets in recent weeks, underscoring concerns about a recovery hampered by an asset crisis, deflation and weak consumer confidence.
The measures include releasing more long-term cash for banks, tightening rules on lending shares for short sales and widening developer access to loans. Still, investors may need to look further to restore their confidence in China’s markets.
benchmark CSI 300 Index 2024 is down about 4% so far, trading at its lowest level in five years. The yuan has joined most other Asian currencies in decline this year, while yields on benchmark government bonds fell to their lowest in nearly 22 years on Tuesday amid bets on more easing.
Additional help for the economy may be necessary if the government is to announce an ambitious target for expansion when the national legislature meets in March this year. Many Chinese provinces are aiming for GDP growth of 5% or more in 2024, and economists are already expecting quite an ambitious target.
Here is a list of measures that have either been announced or reported at the start of the year as China looks to aid the economy and calm investors.
January 28: Securities lending ban
Securities regulators said they will stop lending some stocks for short selling, the latest effort to stem the stock market slide. Strategic investors, which typically refer to holders of restricted shares, will not be allowed to lend out stocks during the agreed lock-up period.
January 27: Relaxation in real estate
Guangzhou, one of China’s biggest cities, further eased home-buying restrictions to stem falling prices. Beijing, Shanghai and Shenzhen have eased down-payment requirements since November.
January 26: Support for developers
The Ministry of Housing and Urban-Rural Development said it will provide a list of housing projects eligible for financing assistance by the end of the month, the latest effort to boost lending to real estate to ease the sector’s slowdown. .
On the same day, the National Financial Regulatory Administration urged banks to support the requests of qualified developers, including extending existing loans and adjusting repayment arrangements.
24 January: rrr cutProperty Loan, and more
Governor of the People’s Bank of China Pan Gongsheng It said the central bank would reduce the reserve requirement ratio – the amount of cash lenders must keep in reserve – by 0.5 percentage points on Feb. 5 to release 1 trillion yuan ($139 billion) in long-term liquidity into the market. The announcement came after official data showed that the country’s economy is still facing major challenges, the biggest RRR cut since 2021.
Hours later, regulators unveiled more measures, including widening the use of commercial property loans for developers to help them repay other loans.
The same day, officials in China and Hong Kong announced steps to deepen financial ties, including facilitating real estate purchases and expanding a program that allows individual investments in the Greater Bay Area, 70 Region of million people that includes Hong Kong and megacities. Southern mainland like Shenzhen and Guangzhou.
January 23: Stock rescue package
According to Bloomberg report, policymakers are considering using about 2 trillion yuan from the offshore accounts of mainly Chinese state-owned enterprises as part of the stabilization fund to buy onshore shares through the Hong Kong Exchange Link. Have been. They also earmarked at least 300 billion yuan of local funds to invest in onshore shares through China Securities Finance Corp or Central Huijin Investment Ltd. A day before, the premiere Li Qiang Called on authorities to take more “strong” measures to stabilize the stock market and investor confidence. His request came after the CSI 300 index hit a five-year low.
19 January: State procurement signals
Total turnover in some of the country’s top exchange-traded funds – usually watched for signs of state-led buying – reached the third-highest weekly total ever. This was the highest since July 2015, when the so-called “national team” tried to balance sales momentum amid the bursting of an epic bubble.
January 16: Special Bond
China is considering issuing up to 1 trillion yuan of new debt under a so-called special sovereign bond scheme, Bloomberg News reports. The proposal discussed by senior policymakers would involve the sale of ultra-long sovereign bonds to finance projects related to food, energy, supply chains and urbanization.
January 5: Rental accommodation
PBOC and NFRA published guidelines on financial support for the development of the market for rental housing. This included a policy of encouraging banks to provide loans to developers, industrial areas, certain rural organizations and companies to build new houses for long-term rental or to renovate existing facilities for that purpose.
The measures include releasing more long-term cash for banks, tightening rules on lending shares for short sales and widening developer access to loans. Still, investors may need to look further to restore their confidence in China’s markets.
benchmark CSI 300 Index 2024 is down about 4% so far, trading at its lowest level in five years. The yuan has joined most other Asian currencies in decline this year, while yields on benchmark government bonds fell to their lowest in nearly 22 years on Tuesday amid bets on more easing.
Additional help for the economy may be necessary if the government is to announce an ambitious target for expansion when the national legislature meets in March this year. Many Chinese provinces are aiming for GDP growth of 5% or more in 2024, and economists are already expecting quite an ambitious target.
Here is a list of measures that have either been announced or reported at the start of the year as China looks to aid the economy and calm investors.
January 28: Securities lending ban
Securities regulators said they will stop lending some stocks for short selling, the latest effort to stem the stock market slide. Strategic investors, which typically refer to holders of restricted shares, will not be allowed to lend out stocks during the agreed lock-up period.
January 27: Relaxation in real estate
Guangzhou, one of China’s biggest cities, further eased home-buying restrictions to stem falling prices. Beijing, Shanghai and Shenzhen have eased down-payment requirements since November.
January 26: Support for developers
The Ministry of Housing and Urban-Rural Development said it will provide a list of housing projects eligible for financing assistance by the end of the month, the latest effort to boost lending to real estate to ease the sector’s slowdown. .
On the same day, the National Financial Regulatory Administration urged banks to support the requests of qualified developers, including extending existing loans and adjusting repayment arrangements.
24 January: rrr cutProperty Loan, and more
Governor of the People’s Bank of China Pan Gongsheng It said the central bank would reduce the reserve requirement ratio – the amount of cash lenders must keep in reserve – by 0.5 percentage points on Feb. 5 to release 1 trillion yuan ($139 billion) in long-term liquidity into the market. The announcement came after official data showed that the country’s economy is still facing major challenges, the biggest RRR cut since 2021.
Hours later, regulators unveiled more measures, including widening the use of commercial property loans for developers to help them repay other loans.
The same day, officials in China and Hong Kong announced steps to deepen financial ties, including facilitating real estate purchases and expanding a program that allows individual investments in the Greater Bay Area, 70 Region of million people that includes Hong Kong and megacities. Southern mainland like Shenzhen and Guangzhou.
January 23: Stock rescue package
According to Bloomberg report, policymakers are considering using about 2 trillion yuan from the offshore accounts of mainly Chinese state-owned enterprises as part of the stabilization fund to buy onshore shares through the Hong Kong Exchange Link. Have been. They also earmarked at least 300 billion yuan of local funds to invest in onshore shares through China Securities Finance Corp or Central Huijin Investment Ltd. A day before, the premiere Li Qiang Called on authorities to take more “strong” measures to stabilize the stock market and investor confidence. His request came after the CSI 300 index hit a five-year low.
19 January: State procurement signals
Total turnover in some of the country’s top exchange-traded funds – usually watched for signs of state-led buying – reached the third-highest weekly total ever. This was the highest since July 2015, when the so-called “national team” tried to balance sales momentum amid the bursting of an epic bubble.
January 16: Special Bond
China is considering issuing up to 1 trillion yuan of new debt under a so-called special sovereign bond scheme, Bloomberg News reports. The proposal discussed by senior policymakers would involve the sale of ultra-long sovereign bonds to finance projects related to food, energy, supply chains and urbanization.
January 5: Rental accommodation
PBOC and NFRA published guidelines on financial support for the development of the market for rental housing. This included a policy of encouraging banks to provide loans to developers, industrial areas, certain rural organizations and companies to build new houses for long-term rental or to renovate existing facilities for that purpose.
