From HSBC:
Local media has reported that two policy banks, namely China Development Bank and Agricultural Development Bank of China will issue as much as RMB1.5trn in bonds to finance major infrastructure investment. The focus will be on shanty town renovation, urban transport, railway construction in mid-west China, public goods provision and manufacturing upgrading. The move should open up another channel of long-term financing for infrastructure projects, apart from the usual bank lending, municipal bonds and private-public partnerships. The proceeds, mostly used as seed capital, should help generate a recovery in investment growth in the coming months. We also forecast an additional 25bps policy rate cut and 200bps reserve ratio cut. The combination of monetary and fiscal easing should help strengthen the growth recovery in 2H 2015.
HSBC is basically the most bullish and worst of the banks on China. This is roughly $230 billion in stimulus or roughly a quarter point of GDP if all spent in one year. It more “glide slope” management not a “recovery”. And here is why, from Investing in Chinese Stocks:
Wanda Group Chairman Wang Jianlin says a rapid increase in homes prices has no basis and no possibility because supply exceeds demand, unlike previously when demand outstripped supply.
With the policy blowing warm air frequency, in the first seven months, the national property market turnover rose significantly. The latest data released by the China Index Research Institute, July 2015, 100 cities nationwide average price of new homes rose three consecutive months. Experts say that while second-tier cities real estate market began to pick up, but the performance is not optimistic about the four-tier cities, the market is still showing the pattern of supply exceeding demand, destocking is still the top priority, the future price trend will stabilize.iFeng: 王健林：整体看房价暴涨已不存在基础和可能
Wanda Group is one of China’s largest developers.
