Ex-PBOC Official Urges Caution on Effects of Property Curbs
(Bloomberg) -- China should be mindful of the pace and intensity of its curbs on the property market, as well as the combined effects of different policies on the financing of developers, a former central bank official said.
“The liquidity risks that real-estate companies currently face is not a problem of policy direction, but is reflective of the intensity and pace of policy implementation and the combined impact of policies,” Sheng Songcheng, a former official of the People’s Bank of China, said at the annual Caixin summit Saturday. “The tone and direction of China’s real-estate market regulation are correct,” he said.
While marginal easing in the curbs is needed to satisfy reasonable financing needs of developers, the general direction of real-estate tightening will not change and China will not return to the old path of relying on the property market to stimulate growth, he said. “Developers shouldn’t have such illusions,” according to Sheng.
He said the real-estate market is expected to maintain healthy development because China has ample policy tools -- both fiscal and monetary -- to cope with downward pressure on economic growth. Real estate will no longer be the main growth driver of China’s economy in the future, he said.
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