Talk of negotiations between China and the Imp

Talk of negotiations between China and the Imp

1) The IMF proposes that the Chinese government use $1 trillion worth of one-time financial resources to complete the country's currently troubled unfinished homes.  

2) One trillion dollars is a huge cost equivalent to about 5.5% of China's GDP over the next four years.

3) The Chinese side effectively rejected the IMF's proposal. Repeating the existing position that the houses should be completed and delivered by applying market principles and rule of law.  

4) The IMF discussed the matter with Chinese officials at the end of May and compiled the report in July, pointing to Beijing's reluctance to provide passive market support and large-scale fiscal stimulus measures, fearing a prolonged housing market slump in China.

5) Investment banks view that if conditions in China continue to deteriorate, Beijing will eventually have to move away from its current approach and strengthen policy support for the housing market.  

6) China's property slump has been the biggest stumbling block in the country's economic growth in the last two years, with authorities only bent on preventing it from turning into a financial crisis. The leadership's ostensible reason is that it is shifting economic growth engines from real estate to technology and manufacturing.  

7) A fund worth 300 billion yuan ($42 billion), the largest relief package ever announced in May, has been set up, but it is currently far short of the 1 trillion to 5 trillion yuan the market needs.  

8) Investment banks predict that the Chinese authorities are unlikely to smoothly reverse their policies overnight.    

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