MNI China Press Digest Oct 21: Property, Economy, Monetary

Highlights from Chinese press reports on Tuesday:

• China’s real estate market continues to undergo a deep adjustment with price concessions driving most transaction volumes, according to Yan Yuejin, deputy director at the E-House Real Estate Research Institute in Shanghai. Yan emphasised that policymakers must act to stabilise the market while maintaining that the long-term trend of gradual improvement remains intact. September data showed sales prices of newly built commercial residential properties fell month-on-month by 0.3%, 0.4%, and 0.4% in first, second and third-tier cities. Year-on-year, prices in first-tier cities dropped 0.7%, narrowing by 0.2 percentage points from the previous month. Li Yujia, chief researcher at the Guangdong Urban and Rural Planning Institute, said new home prices in the fourth quarter will face downward pressure as developers rush to meet annual sales targets.
• China’s economy will likely face mounting downward pressure in the fourth quarter, driven by a high comparison base, tariff uncertainties and the diminishing impact of earlier stimulus measures, according to Wu Chaoming, chief economist at Caitong Financial Holdings. To meet the full-year growth target of around 5%, Wu emphasised the need for stronger, targeted policy support aimed at stabilising investment and stimulating consumption, with the introduction of additional policy measures in the fourth quarter remaining a distinct possibility. Wu cautioned that the recovery in household consumption continues to face multiple headwinds as the combined effect of a high base and less multiplier efficiency further weakens existing replacement and upgrade programs.
• China’s moderately accommodative monetary policy stance should continue in Q4 to offset downward pressure on the economy and mitigate external uncertainties, said Li Chao, chief economist at Zheshang Securities. Li anticipated that by the end of the fourth quarter, the People’s Bank of China (PBOC) will implement a 50-basis-point reduction in the reserve requirement ratio (RRR) and a 10-basis-point interest rate cut. Wang Qing, chief macro analyst at Orient Securities, noted the impact of the U.S. high-tariff policy on global trade and China’s exports may become more pronounced in the fourth quarter. At the same time, slower investment and consumption growth have increased the urgency for stronger policy action. “Given these conditions, there remains room for additional cuts in policy rates and the LPR this year,” Wang said.