MNI China Press Digest Jan 18: Property, Fiscal, Tax

Highlights from Chinese press reports on Thursday:

• The housing market is expected to see a seasonal sales boom in Q1, though the intensity will be much weaker than the same period last year, with houses prices likely to hover at a low level, said Li Yujia, chief research fellow at the Guangdong Urban & Rural Planning and Design Institute. Home sales in terms of square meters will likely decrease by about 5% y/y in 2024, compared to an 8.5% decline in 2023, said Chen Wenjing, research director of China Index Academy. Meanwhile, the central bank’s restart of the Pledged Supplementary Lending (PSL) facility and accelerated implementation of the “three major projects” namely affordable housing, urban village renovation and public infrastructure are expected to provide some support for real-estate investment, said Chen. (Source: 21st Century Business Herald)
• Policymakers should balance active fiscal policy between investment and consumption to maximise effectiveness this year, according to Luo Zhiheng, director at the China Chief Economist Forum. Luo called for wealth transfers to groups such as those below the poverty line and college students facing employment pressure. The central government should share the burden with local governments when providing consumption based subsidies in China's west, Luo added. Policy experts should not focus on whether the deficit rate needs to exceed 3%, but on how the resources are allocated and what level is needed to push the economy towards its potential growth rate. Luo favoured an expansion of the fiscal deficit above increased use of special bonds. (Source: Yicai)
• Authorities have taken steps to address the growing demand for cross-border tax and fee payment using the Yuan, according to a notice from the People's Bank of China. The notice clarifies business processes and account usage methods for cross-border tax and fee payments in various currencies, including the yuan. For next steps, the PBOC and Ministry of Finance, and the State Taxation Administration will guide regions to effectively guarantee timely payment and refund of cross-border tax and fees, and continuously improve service quality and efficiency, the notice said. (Source: Securities Daily)