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.
- The situation highlights the need for more nuanced understanding of the complex interplay between government intervention, market dynamics, and institutional constraints in addressing entrenched economic issues.
- How will China's policymakers balance the need for immediate action with the long-term risks of moral hazard and over-reliance on state support for the property sector?