China’s leaders on Monday stressed the importance of preventing and defusing financial risks, saying they are linked to national security and the asset security of Chinese people.
The risks “are a major hurdle that must be overcome,” said the Politburo, a top decision-making body of the ruling Communist Party, was quoted by state media as saying. Valuations of property, which accounts for around half of household wealth in China, have slumped across the country in recent years due to persistently declining prices as the sector convulsed and market sentiment flattened under a mountain of debt held by developers.
China announced “historic” steps on May. 17 to stabilize the property sector, including cutting downpayment requirements and removing the floor for mortgage rates, aiming to clear inventory and boost homebuyer demand. The Politburo, in a meeting chaired by President Xi Jinping, reviewed the regulations on accountability for preventing and resolving financial risks, saying they must be “strict” to send a strong signal on responsibility.