For much of the past year, China’s economy has been reeling under Xi Jinping’s dual campaigns to rein in soaring property prices and to stamp out any traces of Covid-19 within the country’s borders.
Now, as he moves to loosen pandemic restrictions, China’s leader, Mr. Xi, is signaling a reversal of his real-estate crackdown, too, a tacit acknowledgment of the economic pain and public frustration that the two policies have engendered.
China’s central bank and top banking regulator issued a wide-ranging series of measures aimed at bolstering housing demand and supply, according to a notice circulated on Friday to the country’s financial institutions and officials involved in policy-making. The authenticity of the document was confirmed by people close to the central bank.
The new policies, which were signed off on by Mr. Xi, according to the officials involved in policy-making, unwind some of the previous restrictions aimed at curbing property developer debt and give lenders permission to extend loans to home builders in financial trouble.
“These property measures, on top of announcements of Covid loosening, are a clear indication that Beijing’s efforts to support growth are intensifying,” said
Michael Hirson,
head of China Research at 22V Research, a New York-based firm focused on investment strategy.
While local governments across China have taken more modest measures to ease some of the pressure facing real-estate companies, the new bundle of 16 measures represents the single biggest step yet to rescue a sector that has for decades been a key pillar of growth for the world’s second-largest economy.
The property measures had led to falling home sales, hurting overall growth in the real-estate sector.
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Cfoto/Zuma Press
Chinese home prices for decades outpaced the rate of broader economic growth.
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