Beijing – In a bid to keep its 2026 growth target on track, Chinese authorities unveiled a package of measures on Tuesday aimed at revitalizing the nation’s lagging property sector and broader economy.
Targeted credit easing
The People’s Bank of China said it will reduce the interest rate on its pledged supplementary lending (PSL) facility by 0.25 percentage point, bringing the one‑year rate to 1.5%. PSL provides low‑cost financing to state policy banks for public projects, and the rate cut is intended to encourage banks to lend more to support national strategies.
Boost for technological innovation
Alongside the rate cut, the central bank will raise the quota for relending to technology‑focused projects by 200 billion yuan, taking the total to 1.4 trillion yuan (about $208 billion). This expansion is designed to spur innovation and modernize key industries.
Mortgage interest subsidies
The Ministry of Finance announced a new subsidy program for eligible first‑time homebuyers. Starting in October, qualifying buyers will receive a subsidy equal to an annualized 1 percentage‑point reduction on mortgage interest for up to five years. To qualify, the purchased home must be no larger than 120 square meters and priced at 1.5 million yuan (approximately $224,000) or less.
Policy context
Analysts say the package reflects a “targeted approach with lower funding costs to support selected sectors through policy banks and the real estate sector,” according to Gary Ng, senior economist for Asia Pacific at Natixis. The measures aim to stimulate housing demand in lower‑tier cities, which continue to face significant headwinds.
China’s leadership is targeting a 4.5%‑5% expansion for the full year, down from the 5% growth recorded last year. The economy grew 4.3% in the April‑June quarter, the weakest pace in more than three years, while the property market has struggled after a crackdown on excessive borrowing led to price declines of roughly 20% since 2021.
Looking ahead
Officials hope the new credit incentives and homeowner subsidies will help China meet its minimum growth target and stabilize the property market as the year‑end deadline approaches. The State Council also discussed strengthening macro‑policy effectiveness in response to ongoing economic challenges.
Original reporting: Alexandria, VA News – WTOP News — read the source article.
