Now in its third year of an unprecedented housing market downturn, Chinese President Xi Jinping appears to be finally showing concern, sparking speculation about quantitative easing and a bull run in Hong Kong-listed Chinese stocks.
A recent readout of the Politburo meeting, released late last month, explained investors’ excitement. The country’s 24 most powerful men (yes, all men) seemed open to a different approach to solving the housing crisis, calling for coordinated action to digest the existing housing stock.
The last time the Politburo reported real estate inventory issues was in mid-2016. A huge stimulus in the form of slum redevelopment followed, with the People’s Bank of China providing more than 3 trillion Chinese yuan ($416 billion) released committed loans for support. That initiative has lifted the Chinese real estate and stock markets out of a slump. Since Beijing has been putting forward the idea of urban village renovation lately, Xi is essentially opening the door to his second bazooka.
