The mainland begins to save the property market

The mainland's real estate development investment increased by 4.4% year-on-year last year, 2.6 percentage points slower than the previous year, and the overall economic growth accelerated from 2.2% to 8.1% last year.

HSBC expects that the mainland's economic growth will slow to 5.6% this year. Qu Hongbin, co-head of HSBC Economic Research Asia Pacific and chief economist of Greater China, believes that the mainland real estate market is still in a downward stage. It will further drag down the economy, but I believe the central government will not "stimulate" the property market again.

The Central Committee will mainly focus on adjusting the financing policies of the real estate market, such as distinguishing high-leverage real estate enterprises and encouraging banks to support developers with relatively healthy businesses; it will also adjust the mortgage policy to further relax the approval of loans involving rigid needs, stabilize market expectations and prices, and maintain The market is basically stable, which will also indirectly support consumer demand.

However, the economy is still facing the risk of a rebound in the epidemic. In particular, some cities in the mainland have confirmed cases of the variant virus (Omicron). We are concerned that if the city is closed again, it will continue to drag down growth. In addition, the world faces the risk of economic slowdown and supply chain disruptions, and China's major exports will also be affected.

Although the People's Bank of China has lowered the winning bid rates for the Medium-Term Lending Facility (MLF) and 7-day reverse repurchase, the central bank is still expected to implement more easing measures and will rely more on credit easing this year. He also expects that the People's Bank of China will still reduce the RRR by 100 points, mainly in the first half of the year, and will also increase various re-lending tools to support green projects and small and medium-sized enterprises.