China ramps up economic support as Country Garden vote looms
By Ziyi Tang, Clare Jim and Xie Yu
BEIJING (Reuters) -China stepped up measures to boost the country's faltering economy on Friday, with top banks paving the way for further cuts in lending rates and sources saying Beijing plans further action including relaxing home-purchase restrictions.
As part of those measures, the authorities also cut the amount of funds institutions need to hold in foreign exchange reserves. The measures cheered investors, and analysts said they should prevent a further downturn in the ailing property sector.
China is grappling with a slowdown that has rattled global markets, with the spotlight now firmly focused on troubled developer Country Garden's spiralling debt crisis in a sector that contributes to roughly a quarter of the economy.
As pressure mounts, the authorities have rolled out a series of measures to spur the economy and revive the property market, with steps including the easing of some borrowing rules and a cut to the amount of forex banks must hold as reserves.
The country is set to take further action including relaxing home-purchase restrictions, four people familiar with the matter said.
Regulators including the housing ministry, central bank and financial regulator in coming weeks will implement measures they have been working on over the past few months under State Council guidance, two of the people said.
ANZ's senior China economist Betty Wang said several nation-wide property easing measures in the past couple of weeks have exceeded market expectations.
«This is the first time since 2021 that China has announced a series of nationwide property easing measures. They will help restore market confidence and prevent the sector from declining further.»
COUNTRY GARDEN TEST
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