BEIJING: China's leaders have pledged greater steps to support the country's flagging real estate market, state media reported Tuesday, as they detailed plans to lift the world's second-largest economy out of an uneven rebound.
China's economy is battling headwinds on multiple fronts but a debt crisis in its property sector is foremost among its woes.
Beijing's top decision-makers, including President Xi Jinping, pledged at an annual closed-door meeting held Monday and Tuesday to "actively yet safely defuse risks in the real estate sector" and "meet the reasonable financing needs of real estate enterprises."
They said they would "coordinate efforts to defuse risks from small and medium-sized financial institutions in real estate local debt", state broadcaster CCTV said.
And they promised to "continue to effectively guard against and defuse risks in key areas."
Ratings agency Moody's downgraded the outlook on China's credit rating last week to negative from stable, citing "broad downside risks to China's fiscal, economic and institutional strength" sparked by the crisis in the real estate market.
Beijing's finance ministry insisted the agency's concerns about China's economy were "unnecessary."
But woes in the property sector – a traditional engine of growth – remain one of the largest sources of worry.
That industry is mired in a deep debt crisis, with some of China's biggest developers owing hundreds of billions of dollars and facing going out of business.
Construction and real estate account for around a quarter of China's gross domestic product.
Heavily indebted property giant Evergrande was this month given until late January to put together a restructuring plan, extending a deadline that could lead to its liquidation.
Once China's biggest real estate developer, Evergrande has reported more than US$300 billion in liabilities.
Authorities are on edge – debt fears are stoking buyer mistrust, sending home prices plummeting and, crucially, threatening to infect other sectors.
Officials at this week's economic meeting acknowledged that "China still has to overcome some difficulties and challenges to further revive the economy."
They also "decided priorities for the economic work in 2024" and Xi gave a speech, state news agency Xinhua said.
"China's economy has achieved a recovery," the report quoted them as having noted, and that "favourable conditions outweigh unfavourable factors in China's development."
"The fundamental trend of the economic recovery and long-term positive outlook has not changed," Xinhua quoted them as saying.
Xi warned last week that China's economic recovery remained "at a critical stage", and ordered measures to boost demand and "defuse" risks.
Exports rose in November for the first time in seven months, although the reading compared with a low base from last year when the impact of draconian Covid policies was being felt the most.
Chinese exports – another key driver of growth – had largely been in decline since last October, except for a short-lived rebound in March and April.
A surprise drop in imports in November also highlighted weak consumer activity at home.
And figures last week showing China's slide into deflation accelerated in November also painted a grim picture.
Officials said the decline was linked to "downward fluctuations in the prices of energy and food."
China is aiming for "around five per cent" growth this year, from a low base last year when the domestic economy was paralysed by the strict Covid restrictions.
But Beijing faces an uphill battle to achieve that target, with authorities under pressure to offer greater support after issuing sovereign bonds worth one trillion yuan (US$137 billion) in October.