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China has announced plans to boost the property market and prevent a further decline, according to a report of a high-level meeting led by Chinese President Xi Jinping. The goal is to stabilize the real estate sector and promote a steady recovery, addressing concerns of the public. Measures discussed include strengthening fiscal and monetary policies, with a focus on issues such as employment and an aging population. Stock markets in mainland China and Hong Kong responded positively to the news, with Chinese property Stocks surging by nearly 12%.

The real estate sector, which used to account for over a quarter of China’s economy, has been struggling since a government crackdown in 2020. The decline in the property market has affected local government revenue and household wealth, contributing to a slowdown in economic growth. To stimulate the economy, the People’s Bank of China recently announced interest rate cuts and support for the real estate market. Data shows a moderation in the decline of new home sales and average prices, suggesting stabilization in the housing market is crucial for boosting economic activity.

The high-level meeting also called for measures to limit housing supply growth, increase loans for specified projects, and reduce Interest rates on existing mortgages. While specific details were not provided, the meeting reflects a shift towards policy support at the highest levels of decision-making in China. Analysts expect further government support to be implemented, emphasizing the importance of taking action to address economic challenges.

The meeting’s discussion on economic targets indicated a less aggressive approach compared to previous statements, aiming to strike a balance between short-term growth and structural issues. Forecasts by Goldman Sachs and other firms have been revised downwards, with expectations of economic growth below 5%. Policy meetings like these typically occur in April, July, and October, with the emphasis on stabilizing growth reflecting concerns about the current economic trends.

Overall, reactions to the meeting varied among analysts, with some anticipating more proactive initiatives and others questioning the scale of potential stimulus measures. The effectiveness of fiscal stimulus in China has been a subject of debate, with some experts highlighting the need for a transition to higher-quality growth and a stronger high-tech industry. In the midst of economic challenges, policymakers are working towards a balanced approach to address the country’s economic needs.

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