China: Uneven recovery and property reform support – BNY

BNY’s Wee Khoon Chong highlights that China’s factory slump is easing, with manufacturing PMI edging higher and export orders returning to expansion, while services and construction remain weak. Authorities announced property market reforms to strengthen homebuyer protections, shift toward completed‑home sales and extend mortgage terms, alongside efforts to broaden financing channels for viable developers.

PMI stabilization and housing overhaul

"Chinese factory slump eases, but weak services signal uneven recovery."

"China’s August PMI release showed a modest improvement in factory activity, while non-manufacturing remained weak. The manufacturing PMI rose to 49.8% in August (49.2% in July), with large firms returning to expansion at 50.6%."

"China has announced property market reforms aimed at strengthening homebuyer protections and accelerating the shift to a new housing development model. The measures tighten presale rules, promote completed-home sales and require more safeguards for buyer funds through regulated accounts and “handover with certificate” practices."

"For homes sold after completion, mortgage disbursement will only occur after sales registration; for presold projects, funding will be delayed until formal completion registration. Authorities also extended the maximum term of individual home loans to 40 years from 30 years."

"In parallel, regulators said developers’ reasonable financing needs should be better met, with a greater focus on project viability, and financing channels will be broadened through equities, bonds, asset-backed securities and REITs. The package is designed to reduce delivery risks, improve transparency, raise housing quality and support safer transactions."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)