Wednesday 22 October 2008


CHINA’S HOME-SALES STIMULUS MAY FAIL TO PROTECT ECONOMIC GROWTH

Li Yanping

Bloomberg, October 23, 2008

China's measures to encourage home sales aren't enough to stop a cooling property market from dragging down growth in the world's fourth-largest economy, said Credit Suisse AG and Standard Chartered Bank Plc.

The government yesterday trimmed costs, including mortgage rates, taxes and down-payments, for first-home buyers.

“This is the biggest property rescue package in China's history, but it didn't touch the two most critical areas that are dragging down the property market -- property developers' stressed cash flows and consumers' expectations for further price drops,” said Tao Dong, chief Asia economist at Credit Suisse in Hong Kong. “The measures won't do the job.”

China's economic expansion cooled to 9 percent in the third quarter, the slowest pace in five years, as the global financial crisis cut demand for exports. A slump in property, hurting investment and consumption, is the next big risk, said Tao.

(...) [artículo aquí]

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