China’s Regulators Vow to Stabilize Property, Stock Markets

(Bloomberg) — China’s regulators vowed to step up efforts to stabilize housing and stock markets and pursue more effective financial policies after a meeting in which top leaders called for more stimulus.

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The government will promote the recovery of the real estate market through measures such as increasing demand and controlling the supply of land for new development, China News Service reported, citing Dong Jianguo, deputy minister at the housing ministry. He spoke at a conference on Saturday.

The China Securities Regulatory Commission said it will improve market monitoring for futures and spot trading and strengthen supervision of margin trading, derivatives and quantitative trading, according to a statement on its website.

The Ministry of Finance said it will implement more effective and sustainable fiscal policies and improve macroeconomic regulations next year. According to the statement on the website, the government will also increase the issuance and use of local government special bonds and expand investment areas.

The comments came after officials led by President Xi Jinping vowed to increase the fiscal deficit target next year following a two-day meeting of the Central Economic Work Conference in Beijing. For only the second time in at least a decade, they have made “strongly increasing consumption” and stimulating overall domestic demand their top priority.

China’s struggling economy has made a modest recovery in recent weeks, with signs of recovery in consumption and factory activity following more government support. But overall confidence remains weak because policies are not strong enough to save the economy from deflation.

Figures released on Friday showed China’s credit expansion unexpectedly slowed in November, in a sign of the challenges facing policymakers. Loans to the real economy, excluding those given to financial institutions, fell to their lowest level since 2009 in November. This offset higher government bond issuance, which dragged down overall credit growth.

More relaxation is on the cards. China will reduce interest rates and required reserve ratio on time next year, 21st Century Business Herald reported on Saturday, citing Wang Xin, director of the research bureau of the People’s Bank of China.

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