economy is weakening
China attracts investors with better conditions
08/25/2023, 12:45 p.m
The economy in China is struggling to get out of the low after the Corona crisis. The markets have only known one direction for some time now: down. The government now wants to create incentives with looser credit conditions for real estate buyers and lower brokerage costs for stock trading.
According to reports, further investment incentives are being set up in China to support the flagging economy. According to information from the state news agency Xinhua, the government in Beijing wants to counteract the real estate crisis by relaxing credit conditions. According to a newspaper report, investors in the Chinese stock market can also expect lower brokerage commissions.
The Chinese economy is having great difficulty finding its way back to its old growth strength after the corona pandemic. There is also a severe real estate crisis. This also weighs on the stock market, which is the second largest in the world after the USA. The Chinese stock index CSI 300 has fallen a good four percent so far this year. It includes the top 300 stocks on the Shanghai and Shenzhen stock exchanges. The Hong Kong Special Administrative Region’s Hang Seng Index is even weaker at minus nine percent.
Chinese authorities have issued nationwide policies to ease mortgage lending for certain buyers, Xinhua reported, citing documents from the Bank of China and other regulators. This means lower down payments and lower interest rates. People who want to buy real estate in big cities but have already taken out a mortgage should still be treated as first-time buyers. Among other things, this would mean lower down payments.
The Chinese real estate sector has been in a severe crisis for some time. This threatens to drag down the entire country’s economy because many project developers are stuck in financial problems. In order to keep investors on the stock market, the country’s most important stock exchanges announced last week that they would reduce fees for stock trading from next Monday. Now the stockbrokers are following suit: Eleven brokerage houses have announced lower commission costs, the Chinese financial newspaper “Securities Times” reported.