China's cabinet, the State Council, said this week that it will move with greater urgency to counter a deepening economic slowdown, promising new measures to support growth and studying policies to help stabilize the country's property market.
The shift is notable because Chinese officials had spent months insisting that the priority was simply implementing measures already announced, rather than introducing new ones. The State Council now says it will put in place a package of practical and effective additional policies to safeguard this year's economic goals, according to Bloomberg's reporting on the government's statement.
China's property sector has been a persistent drag on growth for several years, after a long boom in construction and home sales gave way to a prolonged downturn that has weighed on household wealth and construction activity, given how much of Chinese household savings has traditionally been tied up in real estate. Consumer spending has also been softer than officials would like, and the new stimulus signal suggests Beijing is growing more concerned about hitting its growth targets for the year.
The announcement comes as active initial public offering markets in Hong Kong and mainland China have been giving the broader trading outlook some support, even as the underlying economy shows signs of strain. It also lands just as Washington and Beijing have moved to lower tariffs on a wide range of goods, adding a modestly more favorable backdrop for Chinese exporters even as domestic demand remains a bigger challenge.
Markets will be watching for specifics on the new stimulus package and any additional steps to support the property market in the weeks ahead.
Why is China's property market such a big deal for its economy?
A large share of Chinese household wealth has traditionally been tied up in real estate, so a prolonged property downturn weighs heavily on consumer spending and confidence.
Has China announced specific new measures yet?
The State Council has signaled it will introduce additional policies, but detailed measures had not yet been specified as of this report.