As falling home prices continue to stifle property investment and people’s spending, China’s fixed-asset investment ( FAI ) and retail sales have remained stagnant this year.  ,
The country’s FAI increased 3.6 % to 28.7 trillion yuan ( US$ 4 trillion ) in the first seven months of this year from a year ago, according to the National Bureau of Statistics ( NBS ). Investment made by state-owned-enterprises ( SOEs ) grew 6.3 % year-on-year but there was no growth in private investment.
Private investment remained stagnant as property investment increased by 10 % while growth in other industries increased by 10 %.  ,
If property investment is excluded, China’s private investment rose 6.5 % year-on-year in the January-July period while the country’s FAI would have gained 8 %.  ,
For the same time, retail sales, a key sign of China’s domestic consumption, increased 3.5 % to 27.4 trillion rmb, the NBS said Thursday.  ,
Sales of convenience stores, shops and supermarkets rose 5.2 %, 4.5 % and 2 %, respectively. But sales of department stores and branded shops decreased 3.8 % and 1.6 %, respectively.  ,
Online sales with physical goods rose 8.7 % to 7 trillion yuan, representing 25.6 % of total retail sales. Online sales of food and clothes surged 19.7 % and 6.3 %, respectively.  ,
In an article published on Thursday, a Guangdong-based author using the moniker” Dahuzi” writes that “people now have a lower expectation of their property ‘ results because they cannot make money from the estate and property markets.” ” It’s normal that they do n’t want to spend money”.
Folks need to see that the stock market, the house, or prices are going to rise, he says, in order to be more willing to spend money. It all depends on whether the US Fed may begin the price cut period in September.
People will be prompted to enter the housing markets if mortgage rates fall below 3 % while rental yields rise above 3 %, he claims.
Most Chinese banks currently offer mortgage rates between 3.1 % and 3.7 % to homebuyers, with a few in Guangzhou offering rates as low as 2.9 %. Meanwhile, rental yields are about 1-2 %, media reports said.  ,  ,
Falling home charges
According to the NBS, 64 of the nation’s top 70 cities by people saw house prices fall in the first seven weeks of this year from the previous month. In the intermediate industry, all the 70 largest locations saw falls in house prices.  ,
According to a analysis by Reuters, the rate index of previously built home properties fell 4.9 % year-on-year in July, the biggest drop since June 2015. Additionally, it represented a increases for 13 consecutive weeks.  ,
The NBS also said China’s property sales dropped 18.6 % to 541.5 million square meters, or down 24.3 % to 5.33 trillion yuan, in the first seven months from a year ago.  ,
” At the moment, most home index are still falling, meaning that the market adjustment is ongoing”, Liu Aihua, director and chief analyst at the NBS, said in a multimedia presentation on Thursday.  ,  ,
Liu stated that the main government will continue to push ahead initiatives that will ensure the stable and healthy growth of the property markets.  ,
She said these methods include
- a previously announced plan to buy empty properties and turn them into open rental properties,
- a new strategy to let regional institutions make their own property laws
- an ongoing strategy to ensure property developers can finish their construction projects and provide residences to their clients.  ,
Economic stimuli ,
In a meeting presided over by General Secretary Xi Jinping on July 30, the Central Committee of the Chinese Communist Party (CCP ) held a press conference to discuss the Chinese economy’s “favorability” from” changes in the external environment” while domestic demand is still insufficient.
According to the report, significant sectors also face different risks and potential dangers as well as difficulties as a result of replacing conventional growth drivers with new ones.
The meeting stated that it is necessary to develop countercyclical adjustments, accelerate the full implementation of determined policy measures, and get ready to introduce a sample of “incremental plan actions” in a timely manner.
On August 1, Yuan Da, a lieutenant secretary-general of the National Development and Reform Commission, said in a media briefing that the “incremental plan steps” contain the government’s plan to manage 300 billion yuan in ultra-long unique government bonds to grow an existing trade-in and equipment-upgrade policy.  ,
The system, announced on July 25, may at least twice the incentives for new-energy and traditional fuel-powered car payments to 20, 000 renminbi and 15, 000 per car, both. Additionally, it may pay for a variety of upgrades to equipment, including room elevators and agricultural tools.  ,
But, the 300 billion yuan budget is only about 0.3 % of last year’s FAI and retail sales, which added up to a combined total number of 97.45 trillion yuan.
Income from Hong Kong
On the same day as the CCP’s political committee met on July 30th, Xi wrote a letter to Hong Kong businesspeople to encourage investment and promote transformation and ouverture.  ,
Additionally, on July 30, Fang Hanting, a researcher at the Taiwanese Academy of Social Science, suggested creating a payment to manage the Greater Bay Area of Guangdong-Hong Kong-Macau and mandate that everyone in the region use the same money and identity-card program.  ,
The content was eventually removed from the Internet. Shiu Sin-por, a pro-Beijing scientific, said Fang’s suggestion is strong but inappropriate because Guangdong province’s capitalism would follow.
On August 6th, Financial Secretary Paul Chan and staff from Hong Kong’s business community convened a workshop to” study the nature of Xi’s notice.”
However, Hong Kong-listed CK Infrastructure announced on Wednesday that it had received permission to list on the London Stock Exchange after receiving authorization from the UK’s Financial Conduct Authority.  ,
When there are significant funding options, CKI Chairman Victor Li, the 96-year-old tycoon’s elder brother, said Thursday that his business has the ability to utilize its foreign capital to invest in Hong Kong or mainland China.  ,
When Deng Xiaoping, the government’s then-leader, called for opening up the Chinese economy in the late 1970s, Li Ka-shing was one of the first group of Hong Kong entrepreneurs to start investing in China.  ,
Read: China statistics show change from FDI to purchase worldwide
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