Chinese Central Bank’s Third Quarter Monetary Policy Meeting Mentions Real Estate for the First Time in over Ten Years

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The monetary policy committee of the People’s Bank of China (PBOC) has just concluded its routine third quarter meeting, making reference to the real estate sector for the first time more than a decade.

The meeting held on 24 September sounded a note of warning, stating that “at present the global pandemic continues to evolve, external conditions have become more severe and complex, and domestic economic recovery remains unstable and imbalanced.”

“[We] need to strengthen research and analysis of marginal changes to domestic and overseas economic conditions, strengthen international macro-economic policy coordination, prevent external shocks, concentrate our energies to effectively see to our own affairs, effectively perform cross-cyclical policy design, effectively perform overall integration of macro-policy for the two years of this year and next year, and support high-quality economic development.”

The meeting further called for “stable monetary policy [that] must be flexible, targeted and rationally moderate, and the maintenance of rationally ample liquidity.”

PBOC will “maintain basic correspondence between growth in the money supply and total social financing with nominal economic growth, and the basic stability of the macro-leverage ratio.”

Ongoing reforms were emphasised, including “driving high-level bidirectional financial opening, and raising economic and financial regulatory capability and risk prevention capability under conditions of increased opening.”

The meeting also marked a departure from decade-long precedent by making reference to the real estate sector – the first time that a quarterly meeting of the PBOC monetary policy committee has done so since the first quarter of 2009.

In the wake of Evergrande Group’s debt crisis, the PBOC meeting called for “maintaining the healthy development of the real estate sector, and maintaining the lawful rights and interests of residential housing consumers.”

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