- China plans to implement stimulus to boost economic growth, the Wall Street Journal reported.
- Beijing may also ease property-ownership rules to prop up the real estate sector.
China plans to inject stimulus funding into its economy and loosen some property rules as the country's post-COVID recovery continues to disappoint, sources told the Wall Street Journal.
Beijing is considering issuing the equivalent of about $140 billion in special treasury bonds, which would be used to finance growth initiatives, such as infrastructure projects, and indirectly help local governments pay down debt, the Journal said.
In addition, previous restrictions on second home purchases within smaller cities may be done away with, allowing more property market activity, according to the report. Previously, most homebuyers were limited to one property to prevent speculation.
The central government's plans for more direct intervention in the economy follow interest rate cuts this week from the People's Bank of China.
And by taking a page from its earlier playbook, Beijing could also be signaling greater unease about recovery prospects.
Previously, analysts told Insider that China had so far avoided boosting growth through direct stimulus, given that the approach caused a years-long debt hangover after 2008's great financial crisis.
But this time around, there may be limited appetite for more infrastructure or for more debt among local governments that are already heavily burdened.
Meanwhile, the country's property sector faces its own high-debt environment, still characterized by developer defaults. And demand from consumers for more property could also be muted by the current oversupply of housing and dim hopes for price appreciation.
After China lifted its pandemic-era restrictions, observers held high hopes for a robust economic rebound to take hold. Though the first quarter saw growth spike to 4.5%, the recovery has quickly been fizzling out.
New data out Thursday on industrial production, retail sales, and investment in May continued the trend of a sharp deceleration seen in April numbers. In addition, the unemployment rate for people between 16 and 24 rose to a fresh record high of 20.8%.