SCIO briefing on financial policy package to stabilize the market and expectations

Economic Daily:

The real estate and stock markets are important indicators of economic performance, as Mr. Li just mentioned. What considerations does the NFRA have in stabilizing the real estate market and the stock market? Thank you.

Li Yunze:

Thanks for your question. Stabilizing the real estate and stock markets is of great significance for boosting social expectations and facilitating domestic demand circulation. The April 25 meeting of the Political Bureau of the CPC Central Committee once again made clear requirements for stabilizing the real estate and stock markets. The NFRA is resolutely implementing the arrangements and requirements of the CPC Central Committee and the State Council, coordinating a comprehensive set of measures and actively advancing related work.

To stabilize the real estate market, we have worked to expand and enhance the effectiveness of the urban real estate financing coordination mechanism, supporting efforts to ensure the delivery of houses. Currently, "white list" loans approved by commercial banks have reached 6.7 trillion yuan, supporting the construction and delivery of more than 16 million residential units. This has strongly protected homebuyers' legitimate rights and interests while providing important support for stabilizing the real estate market. The positive changes in the real estate market are also reflected in the credit data. In the first quarter of this year, outstanding real estate loans increased by more than 750 billion yuan. Within this total, new personal mortgage loans saw their largest quarterly increase since 2022 while housing rental loans grew 28% year-on-year. Recently, several leading international investment institutions that have visited China have expressed their belief that the investment value of the Chinese real estate market is gradually becoming apparent. Next, we will accelerate improvements to a series of financing systems that align with the new model of real estate development, including loan management methods for real estate development, personal housing and urban renewal. We will guide financial institutions to maintain stability in real estate financing, effectively meet the demand for both essential and upgraded housing, strengthen the funding supply for high-quality housing, and help continuously consolidate the stable momentum of the real estate market.

Regarding stock market stabilization, we'll continue to fully leverage the advantages of insurance funds as patient, long-term capital, intensifying efforts to encourage their entry and support market stability. Earlier, we launched pilot reforms to promote long-term insurance fund investment, injecting significant new capital into the stock market. Last month, we further increased the upper limit for equity asset investments by insurance funds, creating additional investment capacity. Next, we will introduce several specific measures to continue supporting the stabilization and invigoration of the capital market. First, we will further expand the scope of the pilot program for long-term investment by insurance funds. We plan to approve an additional 60 billion yuan in the near future, injecting more incremental funds into the market. Second, we will adjust the solvency regulation rules, further reducing the risk factor for stock investments by 10% and encouraging insurance companies to increase their market participation. Third, we will promote improvements to the long-term evaluation mechanism, motivate institutional participation, and encourage the matching of long-term capital with long-term investment opportunities. Thank you.