China Economic Comment_China Weekly_ Weak Work Resumption & Home Sales, NPC Preview

Summary of Key Points from the Conference Call Industry Overview - Industry: Chinese Economy and Real Estate Market - Date: February 24, 2025 Core Insights and Arguments 1. Passenger Turnover Growth: Passenger turnover during the Chinese New Year peak season increased by 7% from 2024 and was 15% higher than pre-COVID levels in 2019 [2][2][2] 2. Property Sales Performance: The growth of 30-city property sales showed a mixed performance with 9% growth in the 14 days before CNY, a significant 72% increase during the CNY holidays, but a decline of 2% in the 18 days after [2][2][2] 3. Construction Work Resumption: The work resumption ratio for over 13,000 construction projects was 47.7% in the third week post-CNY, a decrease of 15.2% YoY, marking the lowest level since 2021 [3][3][3] 4. Housing Prices: Average housing prices in 70 major cities declined by 0.1% MoM and 5.4% YoY, with tier 1 cities experiencing slight increases while lower-tier cities continued to decline [4][4][4] 5. LPR Stability: The one-year and five-year Loan Prime Rates (LPR) remained unchanged at 3.1% and 3.6% respectively in February [4][4][4] 6. Government Support for Private Sector: A meeting held by President Xi with business leaders emphasized support for the private sector and included an action plan with 20 measures to enhance foreign investment [5][5][5] 7. Economic Growth Forecast: The GDP growth target for 2025 is expected to be around 5%, which is considered ambitious given the current economic headwinds [7][7][7] 8. Fiscal Policy Adjustments: An expansion of the fiscal deficit by over 2 percentage points of GDP is anticipated, with a headline deficit projected at 4% of GDP [7][7][7] Additional Important Information 1. Weak Construction Resumption: The construction workers returning ratio was 49.7%, down 7.8% YoY, indicating a slower return compared to previous years [3][3][3] 2. Market Access for Foreign Investment: The action plan aims to fully remove restrictions on foreign investment in the manufacturing sector and expand market access in various service sectors [5][5][5] 3. Trade Policy Concerns: Potential additional tariffs on Chinese goods by the US may lead to further policy support from China throughout 2025 [7][7][7] This summary encapsulates the key points discussed in the conference call, highlighting the current state of the Chinese economy, particularly in the real estate sector, and the government's response to economic challenges.