Property Policy Is Most Important for China, Nomura's Lu Says

The video discusses the challenges faced by the People's Bank of China (PBOC) in effectively transmitting its policies, highlighting issues with the transmission mechanism, debt capacity, and the property sector. Recent policy changes have been made to support the private sector, including directives for banks to lend more to private businesses. The discussion shifts from monetary to fiscal measures, with tax cuts anticipated. The focus then moves to urbanization and the property sector, emphasizing the need to ease restrictions in major cities to stimulate growth.

What are the three main hurdles faced by the PBOC in its policy transmission?

• Trade wars, political instability, and high unemployment

• High inflation, low interest rates, and currency devaluation

• Technological disruptions, environmental concerns, and labor shortages

• Issues with the transmission mechanism, limited debt capacity, and property sector problems

What recent shift in policy response has been observed in China?

• From trade policies to environmental policies

• From monetary policy to fiscal measures

• From fiscal measures to monetary policy

• From domestic policies to international policies

What is considered the most important policy for the Chinese government according to the transcript?

• Trade policy

• Property sector and urbanization policy

• Fiscal policy

• Monetary policy

What is the predicted trend for home sales in low-tier cities?

• Fluctuating sales

• Declining sales

• Stable sales

• Increasing sales

What strategy is suggested to boost urbanization and property sales in big cities?

• Increase restrictions and price controls

• Easing restrictions and increasing land supply

• Focusing on low-tier cities

• Reducing infrastructure investment