China Takes Strong Measures to Revitalize Property Market

China's central bank announced measures to counter the prolonged downturn in its property market, including slashing reserve requirements and interest rates. The reforms aim to revive the slowing economy impacted by the pandemic and falling home prices. Analysts remain cautious, highlighting the need for further fiscal support.

China's central bank unveiled a series of measures on Tuesday to address the prolonged stagnation in its property market, a key component of the world's second-largest economy. Central bank chief Pan Gongsheng announced a reduction in reserve requirements for banks and lowered interest rates on loans to commercial banks.

These measures, combined with reduced down payments for some property purchases, aim to rejuvenate the sluggish economy. The COVID-19 pandemic and plummeting home prices have deterred many Chinese from spending, undermining government efforts to boost consumption of homes and other high-value items.

The announcement provided a boost to share prices, particularly among real estate developers. Hong Kong's Hang Seng index surged 3.6%, and the Shanghai Composite index climbed 3.4%. However, analysts caution that sustained economic recovery will require more extensive fiscal support from the government.

(With inputs from agencies.)