Why it's so hard for China to fix its real estate crisis
China would make it easier to get home mortgages.
It was February 2016 and Zhou Xiaochuan, the central bank's longtime governor at the time, announced what proved to be the start of an extraordinary blitz of lending by China's immense banking system.
Minimum down payments for buying apartments were reduced, triggering a surge in construction. Vast sums were also lent to local governments, allowing them to splurge on new roads and rail lines.
For China, it was a familiar response to economic trouble. Within months, growth started to pick up and financial markets stabilized.
Today, as China faces another period of deep economic uncertainty, policymakers are drawing on elements of its crisis playbook, but with little sign of the same results.
It has become considerably harder for China to borrow and invest its way back to economic strength.
On Friday, China's top financial regulators summoned the leaders of the country's leading banks and securities firms and urged them to provide more loans and other financial support for the economy — the latest in a series of similar admonitions.
But demand for more borrowing has wilted in recent months, blunting the effectiveness of looser lending policies by the banks.
The construction and sale of new homes has stalled. More than 50 real estate developers have run out of money and defaulted or stopped payment on bonds.
The companies have left behind hundreds of thousands of unfinished apartments that many predominantly middle-class families had already purchased, taking out mortgages to do so.
At the same time, companies are wary of borrowing money for expansion as their sales tumble and the economy faces deflation. Local governments across much of China are deeply indebted and
