Title: China Takes Steps to Tackle Property Crisis But More Action Needed

In response to the ongoing property crisis, China has implemented direct interventions to alleviate the cash crunch faced by struggling developers. While seen as a positive step, experts argue that further measures are necessary to address the deepening issue. The extended slump in property sales, investment, and home prices has put pressure on authorities to prevent any contagion in the financial sector.

Rescuing only select developers will not be sufficient to resolve the crisis, and experts believe Beijing should consider increasing fiscal spending and implementing looser monetary policies. Rebuilding confidence is crucial for encouraging homebuyers to start spending again, and the biggest challenge facing Beijing is restoring trust in the sector.

To support the property sector, the government has already implemented various measures, such as easing restrictions on home purchases and cutting mortgage borrowing costs. However, Beijing has refrained from implementing a large-scale stimulus plan to avoid exacerbating debt concerns and weakening the yuan.

In an effort to stimulate the market, Morgan Stanley predicts that Beijing will prioritize urban village reconstruction, social housing construction, and green capital expenditure as part of their fiscal stimulus plan. This indicates the government’s commitment to supporting the sector and reviving market sentiment.

In a significant move, the Chinese government may consider a government-led bailout of Country Garden, a major property developer. This action would not only help restore confidence in the sector but also highlight Beijing’s determination to defuse the debt crisis. According to sources, mid-sized defaulted developers do not foresee a significant impact from the bailout as it is likely to target systematically important firms.

Moreover, Bloomberg News has reported that China plans to provide low-cost financing for urban village renovation and affordable housing programs. This indicates an increasing level of support for the sector and reflects the government’s determination to address the ongoing crisis.

To further boost sentiment towards growth and promote economic recovery, Goldman Sachs suggests additional broad-based monetary policy easing. This could potentially improve investor confidence and encourage greater participation in the property market.

In conclusion, while China’s interventions to ease the cash crunch for property developers are a step in the right direction, analysts emphasize that more measures are necessary to effectively tackle the crisis. Boosting fiscal spending, implementing looser monetary policies, restoring confidence, and providing targeted support for the sector are some of the key actions needed to address the challenges faced by the property market in China.