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China's key property rescue tools are too hard to use to make an impact.

Key tools China introduced last year to stabilise the property market are making very little impact, pressuring Beijing to find new solutions for the crisis-hit sector, which analysts say must involve large-scale direct state purchases of empty apartments. The relending programme has drawn only 16 billion yuan from the facility by the end of September, far short of its intended target. Analysts say the design of this scheme overlooks financial and operational constraints that state-owned firms find hard to overcome.

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China's housing minister has expressed optimism about the country's property sector, citing improving market confidence as policymakers aim to set a more upbeat tone for the economy in 2025. Despite several tough years for the real estate industry, the minister stated that the market has shown signs of stabilisation since January and February. However, analysts predict that home prices will continue to drop further this year, with some estimates suggesting a decline of up to 30% since 2021.

The average price of second-hand residential properties across 100 Chinese cities fell by 0.4% month-on-month in February, according to a report by a Chinese real estate research institute, narrowing for the seventh straight month. Following the implementation of fresh policy support late last year aimed at giving the property sector a boost, a "Mini Spring" rally is on the cards for March in major urban centres. The sales of the top 100 Chinese real estate companies increased an annual 17.3% in February, however cumulative sales for January and February fell by 5.9% year-on-year.

The average price of second-hand residential properties across 100 Chinese cities fell by 0.4% month-on-month in February, following a "Mini Spring" rally that has boosted property transactions in major urban centres, where sales of the top 100 Chinese real estate companies increased an annual 17.3% in February. The narrowing decline marks the seventh consecutive month of price reductions, as policy support and the traditional marketing season sustain the stabilisation trend in the housing market. Despite a year-on-year fall of 7.3%, average prices are still higher than pre-pandemic levels.

China has repeatedly pledged to make the consumer sector a more prominent driver of economic growth but is yet to implement any structural policy changes to achieve this.Analysts say potential costs in the trillions of dollars and risks that reform could bring instability are making officials wary of bold policy decisions.Below are policy options for Beijing and some of the trade-offs involved.

The Chinese government's focus on boosting consumption among young workers may lead to more sensible policies that can boost spending power over the long term, but deflationary risks mounting, officials are under pressure to deliver quick stimulus. Deciphering policy signals from the annual legislative session in Beijing is a daunting task, with every spring bringing around 5,000 senior lawmakers and political advisors gathering for a week to rubber-stamp the party's priorities. The government has lowered its annual inflation target to "around 2%" for 2025, the lowest figure since 2003.

A report from People's Daily highlights China's 2025 action plan to stabilize foreign investment, which outlines 20 policy initiatives across four strategic priorities: phased expansion of autonomous market opening, enhanced investment facilitation, functional upgrades to open-economy platforms, and service system optimization. The move reinforces China's commitment to institutional opening-up, aligning with global investors' calls for predictable regulatory frameworks. Opening up is a fundamental national policy of China, aiming to enrich the path of Chinese modernization by unlocking new frontiers.

China's deflationary economy is intensifying, with the country's consumer price index falling to -0.7% in February, sparking concerns about its impact on growth. As a result, retailers are becoming increasingly desperate to attract customers, with some stores offering flash sales four times a day, including the Wankelai store in Beijing, which sells clothing, snacks, and basic household products. The strategy is driven by consumers who are grappling with uncertainty about jobs and incomes, leading them to seek value-for-money purchases.

China is shifting its focus to boosting consumption in 2025, promising a special action plan to stimulate domestic demand and meet its 5% growth target. The country's household spending remains less than 40% of annual economic output, significantly lower than the global average. Beijing aims to support big-ticket consumer items through an expanded trade-in scheme and issue ultra-long special treasury bonds.

China has swiftly retaliated against fresh U.S. tariffs, announcing 10%-15% hikes to import levies covering a range of American agricultural and food products, and placing twenty-five U.S. firms under export and investment restrictions. The move aims to deescalate tensions by limiting the impact on its domestic market, but raises concerns about the potential for a prolonged trade war. As the situation unfolds, market participants are left wondering how long China will resist further escalation.

China's consumer price index in February missed expectations and fell at the sharpest pace in 13 months, while producer price deflation persisted, as seasonal demand faded and households remained cautious about spending amid job and income worries. The government has vowed to boost consumption through various measures, but analysts expect deflationary pressures to continue. China's economy is still struggling with weak consumption capacity and willingness.

China has introduced additional fiscal stimulus measures aimed at bolstering consumption and mitigating the adverse effects of an escalating trade war with the United States, with a growth target set at around 5%. Premier Li Qiang highlighted the urgency of addressing the "unseen" global changes and the impact on China's trade, technology, and household demand, emphasizing the need for a shift from an export-driven model to one that prioritizes internal consumption. Despite increased government spending plans, analysts express skepticism about the effectiveness of these measures in generating significant consumer demand.

Australia's property market emerged from a shallow downturn in February as the first rate cut in over four years lifted buyer sentiment, although the still-high borrowing costs and elevated prices are clouding the outlook. Figures from property consultant CoreLogic showed prices across the nation rose 0.3% in February from January, ending three months of declines or no growth. The Reserve Bank of Australia has cautioned that any further easing will be gradual, with market pricing suggesting just two more rate cuts to 3.6% by the end of the year.

China's factory activity expanded at its fastest pace in three months to 50.8 in February, according to a private-sector survey, as millions of migrant workers returned to work after an extended Lunar New Year holiday. The seasonally adjusted Caixin/S&P Global manufacturing purchasing managers' index beat expectations and accelerated from 50.1 in January and 50.5 last December. This growth is attributed to "demand strengthened from foreign clients" due to U.S. importers front-running tariffs.

China's manufacturing activity expanded at the fastest pace in three months in February as new orders and higher purchase volumes led to a solid rise in production. The official purchasing managers' index (PMI) rose to 50.2 in February, beating analysts' forecasts, but doubts remain about whether this upturn can be sustained amid a trade war with the US. Chinese policymakers are expected to announce economic targets and fresh policy support next week, which investors will watch closely for signs of further support for the struggling property sector.

Shares of New World Development surged in early trading after the company vowed to boost cash flow and reduce debt. By increasing active property sales and decreasing capital expenditure, New World aims to strengthen its financial position. The move follows a significant decline in the company's market value from $14 billion to $1.5 billion.

China's yuan surged against the dollar on Thursday, reaching a post-revaluation high and heading towards its biggest weekly gain in more than four months. The central bank repeatedly engineered hefty gains for the currency, which is closely watched by investors. The move is seen as an effort to bolster confidence in China's economy and financial markets.

China will step up resources and funding to support employment and unveil new policies to help college graduates get jobs, as the external environment could become more complex and severe. China faces an arduous task to stabilise and expand employment in 2025, minister Wang Xiaoping said, estimating this year's employment will be generally stable. The government aims to provide support for underemployed workers, including temporary job placement services and vocational training programs.

China's central bank and financial regulators held a meeting with private enterprises and financial institutions, vowing to increase lending to private enterprises and expand their fundraising channels. President Xi's private sector symposium guides latest financial meeting. The People's Bank of China (PBOC) pledged financing costs of private enterprises will remain low.

China's gold reserves rose to 73.61 million fine troy ounces at the end of February from 73.45 million at the end of January, as the central bank kept buying the precious metal for a fourth straight month, further fueling investor sentiment and supporting the gold price amid rising geopolitical uncertainty and trade tensions with the US. The PBOC's continued purchases are seen as a key factor in underpinning gold prices, but also pose questions about the sustainability of such policies. Central banks' gold buying has been instrumental in driving gold prices up over the past two years.

Consumer prices fell in China in February for the first time in 13 months, driven by weak demand and the early timing of the Lunar New Year holiday. The National Bureau of Statistics reported a 0.7% drop in consumer prices compared to last year, with prices down 0.2% from January on a monthly basis. As policymakers face flat to falling prices, they risk creating a deflationary spiral that could drag down the economy.

Ministers have outlined plans to abolish the leasehold system in England and Wales, moving towards a commonhold system where flat-owners own a share of their buildings. The government aims to restore control over homes and reduce "unfair practices and unreasonable costs" faced by landlords. By adopting commonhold, homeowners would have more autonomy over what they pay for maintenance and who they appoint to manage their building.

Consumer prices in China have fallen for the first time in a year, with authorities struggling to revive spending amid intensifying trade headwinds. The country's exports are expected to be impacted by US tariffs, which could limit economic growth this year. A prolonged trade war would likely keep inflation at bay, but also mean that consumers cannot rely on exports for strong economic recovery.

Mainland Chinese investors snapped up an unprecedented amount of Hong Kong stocks on Monday, further boosting their holdings amid a tech-driven rally this year, and surpassing the previous record seen in early 2021. The inflows from Chinese buyers came as the Hang Seng China Enterprises Index slid 2.1% following a 5.9% rally last week, but are expected to continue driving market momentum. As the influence of mainland investors grows in Hong Kong's financial hub, concerns about geopolitical risks and market volatility for foreign investors may be offset by speculation over favorable policy toward the AI industry.

China will boost its defence spending by 7.2% this year, maintaining a steady growth rate as Beijing faces headwinds from three years of sluggish economic expansion amid mounting geopolitical challenges from Taiwan to Ukraine. The increase is well above China's economic growth target for this year and reflects Beijing's ambitions for continued military modernisation amid roiling geopolitical challenges. This year's report stresses the importance of combat readiness and scientific and strategic improvements, while also pledging to "continue improving the political conduct of the military".

As interest rates and home prices remain high, prospective buyers are finding themselves with more negotiating power than ever before, as homes linger on the market longer, giving them more time to make their move. The extended inventory and price cuts are a sign that the housing market may finally be exiting its deep freeze, allowing for a more balanced market. This shift is particularly noticeable in regions with high demand, such as coastal Florida, where buyers have an abundance of options to choose from.