Core Viewpoint - The Chinese real estate market is experiencing a significant policy shift aimed at stabilizing the market and promoting healthy development, marking a new phase of "clear operation" [1] Market Recovery Signs - Data from the first nine months of 2025 shows a notable reduction in the year-on-year decline of national commercial housing sales area, decreasing from 13% in 2024 to around 4% [2] - First-tier cities have seen new home prices increase for two consecutive months, while second-tier cities experienced their first month-on-month price growth since June 2023 [2] - The land market is showing increased activity, with a significant narrowing of the year-on-year decline in land acquisition fees, indicating a gradual recovery of market confidence [2] Policy Measures - The recent real estate policy adjustments are characterized as a "combination punch," focusing on "four cancellations, four reductions, and two increases" to activate market potential [2] - "Four cancellations" include the removal of purchase, sale, and price restrictions, greatly enhancing market purchasing power [4] - "Four reductions" involve lowering down payment ratios, reducing existing mortgage rates, guiding new mortgage rates down, and alleviating home purchase tax burdens, directly lowering home buying costs [4] - "Two increases" focus on increasing the supply of affordable housing and providing necessary financial support to real estate companies, ensuring basic housing needs are met while allowing market entities to survive and develop [4] Special Debt Policy - The special debt policy for 2025 amounts to 4.4 trillion yuan, with a significant portion allocated for land storage and acquisition of existing commercial housing, addressing the current inventory backlog [7] - The central bank has increased the support ratio for affordable housing re-loans to 100%, further reducing acquisition costs and accelerating inventory reduction [7] White List Mechanism - The "white list" special loan mechanism has been enhanced, with over 5.6 trillion yuan in loans approved by September 2025, significantly improving the actual loan disbursement rate [9] - This mechanism focuses on supporting the extension of existing credit for real estate companies and financing new projects, particularly prioritizing "guaranteed delivery" projects, stabilizing market expectations and protecting buyers' rights [9] Urban Village Renovation - Urban village and dilapidated housing renovations have been elevated to a critical level, becoming a key driver for releasing housing demand [9] - The renovation scope has expanded from 35 major cities to 300 prefecture-level cities, with an additional one million monetary settlement quotas expected to stimulate substantial housing demand [9] Demand-Side Policies - Demand-side policies have been actively adjusted, including changes to down payment ratios, promotion of "old-for-new" policies, and extension of home purchase subsidy periods, effectively lowering entry barriers for homebuyers [10] - The cancellation of ordinary residential standards has significantly reduced tax burdens for homeowners, exemplified by a potential tax saving of 700,000 yuan for a 10 million yuan second-hand home in Beijing [10] New Development Model - The policy adjustments signal a transition in the real estate market from "high leverage" to "high quality" development, integrating quality, safety, green, and smart elements into housing construction [11] - Local governments are promoting demonstration projects and new construction techniques, aiming to establish a comprehensive safety management system for the entire lifecycle of housing [11] Market Outlook - The real estate market is expected to stabilize and potentially rebound in the second half of 2025, with Fitch Ratings predicting a reduction in the annual sales area decline to below 5% [13] - The liquidity of real estate companies is anticipated to improve, with state-owned enterprises likely to benefit first [13] - Despite challenges such as high inventory and mismatched supply and demand, the ongoing policy efforts are expected to drive industry transformation and sustainable development [13]

Core Insights - The overall fiscal revenue in China for the first half of 2025 was approximately 11.56 trillion yuan, showing a year-on-year decline of 0.3%, with tax revenue decreasing by 1.2% and non-tax revenue increasing by 3.7% [1][3] - The fiscal expenditure for the same period reached 14.13 trillion yuan, reflecting a year-on-year growth of 3.4%, with central government expenditure growing by 9% and local government expenditure increasing by 2.6% [1][4] Revenue Breakdown - Major tax revenues included domestic value-added tax at 3.64 trillion yuan (up 2.8%), corporate income tax at 2.49 trillion yuan (down 1.9%), and personal income tax at 794.5 billion yuan (up 8%) [3][4] - Export tax rebates amounted to 1.27 trillion yuan, marking an increase of 11.6% [3] Expenditure Analysis - Key expenditure categories included social security and employment at 2.45 trillion yuan (up 9.2%), education at 2.15 trillion yuan (up 5.9%), and health spending at 1.1 trillion yuan (up 4.3%) [4][5] - The government accelerated the issuance and utilization of bond funds, with 2.43 trillion yuan spent on various government bonds, leading to a 30% increase in government fund budget expenditure [5] Debt Issuance - The issuance of national bonds reached 7.88 trillion yuan in the first half of 2025, a year-on-year increase of 35.28%, marking the highest issuance scale for the same period historically [7] - The average issuance interest rate was 1.52%, down by 43 basis points compared to the previous year [7] Special Bonds and Consumption Support - Special long-term bonds issued totaled 555 billion yuan, with a focus on supporting state-owned banks' core capital [7][9] - The central government allocated 300 billion yuan in special long-term bond funds to support consumption, with significant growth in retail sales of home appliances and communication equipment [8][9] Local Government Debt Management - The issuance of local special bonds reached 2.16 trillion yuan, a 45% increase year-on-year, with a portion allocated for existing projects [11] - The implementation of a new policy for special bonds allows for greater flexibility and efficiency in fund issuance and usage [11]