China recently poured half a trillion dollars into its struggling property sector. Experts, however, aren’t convinced this is enough to turn things around. The move comes after a summer of poor economic data, raising fears that China might miss its growth target.

Leader Xi Jinping finally rolled out a stimulus package, mainly focusing on monetary measures. Economists were hoping for more, up to 10 trillion yuan ($1. 4 trillion). But the Housing Ministry’s recent press conference didn’t meet these expectations.

“The housing supports announced are only incremental, ” said Larry Hu, a chief China economist at Macquarie. “They might help developers, but won’t stabilize the market. ” Investors agreed, causing shares in China’s real estate index to drop 5%.

The ministry promised to nearly double bank lending to key projects, reaching four trillion yuan ($561 billion) by 2024. In January, China created a “whitelist” of projects for special loans. By mid-October, approved loans hit 2. 23 trillion yuan ($313 billion).

The property sector is a big deal in China, making up about a quarter of the economy and 70% of household wealth. It once contributed to as much as 30% of economic activity. The real estate market started cooling in 2019 and hit a rough patch after government clampdowns on developers’ borrowing.

This crisis has led to falling real estate prices and shaken consumer confidence. People and businesses are trying to save money by selling assets and cutting spending and investment, hurting economic growth.

China’s Property Sector Gets a Half-Trillion Dollar Boost, But Is It Enough?

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