China is not planning any large-scale stimulus measures to smooth out short-term fluctuations in growth according to the deputy finance minister who explained the government’s view is that the country’s basic economic situation has not changed.
Zhu Guangyao’s comments came after official April data showed across-the-board weakness in activity including output, investment and consumption.
Of particular concern to some analysts and investors is the housing market.
Revenues from property sales fell 7.8 percent in the first four of months of the year compared with the same period last year, the latest data showed.
China’s central bank has reportedly just asked commercial banks to speed up approval of home loans and to set mortgage rates at reasonable levels.
But at the National Statistics Bureau they are not too concerned. Spokesman Pan Jiancheng said: “Looking at the average figures over the past two years, property investment volume is still quite large, and there remains a steady increase.”
Weakness in the property market has implications for China’s financial system.
The shadow banking sector has lent vast amounts to developers and a significant slowing could spell trouble.
Housing also directly affects about 40 other industries in China and is considered a crucial pillar of the economy.
Chinese top leaders have flagged on many occasions that they would be more tolerant of slower economic growth while they push ahead with structural reform to pursue a more sustainable growth model.
In the latest indication of Beijing’s determination to push reforms, Chinese President Xi Jinping had said last week the country must adapt to a “new norm” of economic growth and keep “cool-minded” amid a slowing economy.
He also pledged to continue to coordinate the efforts of stabilising growth, promoting reforms, adjusting structure, improving people’s livelihood and preventing risks so as to ensure sound economic growth and social stability.