China has announced a significant economic stimulus package exceeding $300 billion as part of its efforts to boost GDP growth targets for 2024, aiming for approximately 5%. This initiative comes after five consecutive months of halting gold purchases for reserves.
The Chinese government plans to issue special bonds worth 2.3 trillion yuan (over $325 billion) in the last quarter of the year to support large banks, stabilize the housing market, and implement subsidy programs for the impoverished.
In real estate, a comprehensive policy toolkit will be deployed, including local government special bonds, special funds, and tax adjustments. Current mortgage interest rates in China are among the lowest in major economies.
Major banks, including the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, announced detailed measures to adjust interest rates on existing mortgage loans, effective October 25, easing the financial burden for millions of homebuyers. The Central Bank of China's recent interest rate cuts have narrowed bank profit margins to just over 1.54%.
This enhanced stimulus package also aims to increase the public debt ceiling for local governments, addressing concerns about potential financial bubbles. The Chinese Finance Minister emphasized that there remains substantial room for fiscal and monetary policy to support economic growth.