Thread by @ChinaFinance40

Current macro policies should avoid hard landing in the property market while boost the overall economic vitality,pointed out by Zhang Bin, Zhu He and Zhong Yi at CF40 in the working paper How to Prevent the Risk of Hard Landing in the Real Estate Market.1/6

The paper argues China’s #economy still faces great downward pressure in the short term. In particular,risk of hard landing in the #housing market should be prevented. Its threat to financial system is limited,but it will take a heavy toll on the real economy.2/6

To avoid such hard landing, #liquidity crisis of real estate companies should be prevented so as to ensure their cash flows. Specifically, three measures need to be adopted.3/6

1.Loosen the restrictions on mortgage policy in time; adopt city-specific measures to meet the mortgage demand of residents based more on business principles so that the real estate sector can recover and thrive by itself.4/6

2.Allow rollover loans of real estate firms. Meanwhile, emergency bailout loans should be provided to firms that operated well but suddenly face liquidity problem. The rate of loan need not be favorable but the volume should be large enough to help firms cope with the crisis.5/6

3. Delay the rollout of other policies that will have considerable impacts on the real estate sector in the near term.6/6
Read more at: mp.weixin.qq.com/s/KN18abznmXBA…