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.
China's factory activity is showing signs of improvement, with the manufacturing Purchasing Managers' Index (PMI) rising to 49.8% in August, up from 49.2% in July. However, services and construction sectors continue to lag behind. In response to the uneven recovery, Chinese authorities have announced property market reforms to enhance homebuyer protections and promote a shift towards completed-home sales.
These reforms include tightened presale rules, more safeguards for buyer funds, and extended mortgage terms of up to 40 years, as opposed to the previous 30-year limit. The reforms also aim to broaden financing channels for viable developers, encouraging project viability and diversifying financing options, including equities, bonds, asset-backed securities, and Real Estate Investment Trusts (REITs).
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