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Abstract

In June 2024, the "First Financial Chief Economist Confidence Index" released by the First Financial Research Institute was 50.23, lower than the previous month, but still above the 50 boom-or-bust line. Economists believe that the macroeconomy is still in the process of recovery, and future attention should be paid to the effectiveness of policy implementation and the recovery of demand.

ICBC International's Cheng Shi believes that with the government's increased investment in infrastructure and the modernization of the manufacturing industry, as well as a series of policies to stimulate economic growth gradually taking effect, the economy is expected to continue to improve in the second half of the year.

The chief economists' forecast for the May CPI year-on-year is an average of 0.38%, the PPI year-on-year forecast is an average of -1.56%, the cumulative growth rate of fixed asset investment is an average forecast of 4.13%, the total retail sales of consumer goods year-on-year growth forecast is an average of 3.41%, and the industrial value-added year-on-year growth forecast is an average of 5.99%. Their forecast for China's trade surplus in May is an average of $72.738 billion, lower than the published data of $82.6 billion.

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Wu Ge from Changjiang Securities believes that the CPI in the second quarter of the year is still fluctuating in a slightly positive range compared to the same period last year. Given the lagged impact of the previous supply contraction on pig prices, related prices will support the rebound of CPI in the second half of the year, but the increase will be limited.

Chief economists expect financial data for May to rebound from the previous month, with an average forecast of new loans of 1,252.67 billion yuan, the total social financing forecast is 2.18 trillion yuan, and the M2 year-on-year growth rate forecast is an average of 7.37%. At the same time, except for two chief economists who predict that there may be a possibility of reducing one-year and five-year LPR interest rates in the next month, other economists believe that the possibility of this indicator changing is relatively small.

Chen Xing from Caitong Securities said that since May, the pace of government bond issuance has accelerated, and the net financing amount of corporate bonds has also turned from a year-on-year decrease to an increase, with bill rates fluctuating and flattening. Overall, the demand for financing has improved marginally.

On May 30, 2024, the central parity rate of the renminbi against the US dollar was 7.1111. Economists expect that the central parity rate of the renminbi against the US dollar in June will remain stable. Their forecast for the renminbi's exchange rate against the US dollar at the end of June is an average of 7.1, and the expectation for the year-end exchange rate is 7.03.

In this survey, chief economists believe that a series of major real estate optimization policies introduced by the State Council have exerted efforts from both the supply and demand sides, and short-term real estate sales may improve marginally; but in the medium term, the downward trend of real estate may not be fundamentally changed, and there is still room for future real estate policies.

Main TextI. Confidence Index: The confidence index for June stands at 50.23

The First Financial Research Institute released the June confidence index at 50.23, remaining above the 50 boom-or-bust line.

Wang Han from Industrial Securities stated that in April, the economic recovery was driven more by external demand than internal demand, with some deceleration in the momentum of economic recovery. Since May, there has been some improvement in the construction of infrastructure and real estate in the midstream, and the effects of accelerated fiscal policy may gradually become apparent. The momentum of future economic recovery may still depend on the progress of policy implementation. Since May, the progress of local special bond issuance has slightly improved, and the issuance plan for ultra-long-term special treasury bonds has been clarified; the central bank has established a new re-lending tool for affordable housing to resolve existing stock, while also introducing demand-side optimization policies. Looking ahead, the clues for tracking future economic recovery lie in the effectiveness of a series of policies, the strength of confidence recovery in the real economy, and the degree of improvement in the overall supply and demand environment.

Cai Wei from KPMG believes that since late May, the relaxation of real estate policies and the acceleration of fiscal expansion have gradually shown momentum. Looking forward, with the vigorous promotion of a "combination of policies" such as large-scale equipment updates, consumer goods replacement, and ultra-long-term special treasury bonds, infrastructure and manufacturing investment are expected to continue to make positive contributions, and consumer spending may recover steadily. However, data showing unexpected fluctuations indicate that insufficient effective demand is a strong constraint on the current economic recovery, highlighting the necessity for policy efforts.

Xu Sitao from Deloitte China stated that China's cyclical recovery is slowly underway, but the resilience of the economy may be burdened by the sluggish real estate market. Although real estate data may be considered lagging indicators, the real estate industry is in a period of consolidation under the background of strong regulation in recent years and is unlikely to see a turning point immediately. At present, the recovery of consumer confidence is still constrained by the slowdown in recovery and the sluggish real estate market. The economic growth of 5.3% in the first quarter makes the annual growth target of "around 5%" basically achievable.

Cheng Shi from ICBC International believes that with the government increasing investment in infrastructure and the modernization of the manufacturing industry, and a series of policies to stimulate economic growth gradually taking effect, the economy is expected to continue to improve in the second half of the year. On the demand side, as consumer confidence is boosted, CPI is expected to rise steadily in the second half of the year; on the production side, as economic activity recovers, PPI is expected to gradually stabilize in the second half of the year. In terms of monetary policy, the central bank may continue to maintain market liquidity and reduce financing costs through measures such as reserve requirement ratio cuts and interest rate cuts in the second half of the year, supporting stable economic growth and the recovery of market confidence.

II. Prices: The predicted average values for May CPI and PPI year-on-year growth rates are 0.38% and -1.56%, respectively

Economists predict an average year-on-year growth rate of 0.38% for the May CPI, slightly higher than the 0.3% announced by the National Bureau of Statistics last month. Among them, Cheng Shi from ICBC International gave the highest forecast of 0.6%, while Lian Ping from Guangkai Chief Industry Research Institute and Zhu Haibin from JPMorgan Chase gave the lowest forecast of 0.2%.

The predicted average year-on-year growth rate for May PPI is -1.56%, which has rebounded from the value (-2.5%) announced by the National Bureau of Statistics last month. In the survey, the highest forecast for the May PPI year-on-year growth rate is -1.3%, from Xiong Yuan from Guosheng Securities, Zhou Xue from Mizuho Securities, and Cai Wei from KPMG, and the lowest forecast of -2% comes from Chen Xing from Caitong Securities.

Wu Ge from Changjiang Securities believes that with the upward trend of the global economic climate, coupled with the peak summer travel season and factors such as OPEC production cuts, international oil prices are expected to fluctuate and rebound. Under the weak domestic demand pattern, PPI will still hover in the negative growth range on a year-on-year basis, but the low base will lead to a significant narrowing of the decline. The second quarter CPI is still expected to fluctuate slightly above zero on a year-on-year basis. Given the lagged impact of previous supply contractions on pork prices, related prices will support the rebound of CPI in the second half of the year, but the increase will be limited.Best Forecasting Economists' May 2024 Predictions (CPI):

Chen Xing: 0.4%

Ding Shuang: 0.3%

Wang Han: 0.5%

Wen Bin: 0.5%

Best Forecasting Economists' May 2024 Predictions (PPI):

Wang Han: -1.7%

III. Total Retail Sales of Consumer Goods: The average forecast for the growth rate in May is 3.41%.The forecasted average year-on-year growth rate for the total retail sales of consumer goods in May is 3.41%. Among them, the maximum forecast of 6% comes from Minsheng Bank's Wen Bin, while the minimum forecast of 2.5% is given by Lu Ting from Nomura Securities.

Wen Bin from Minsheng Bank believes that with the improvement of the employment situation and the rebound of residents' willingness to consume, coupled with the "May Day" holiday being two days longer than last year, the release of holiday demand has driven the performance of related service industries. The growth rate of consumption in May is expected to significantly accelerate. Looking at the main commodities, the business activity index for the service industry in May was 50.5%, an increase of 0.2 percentage points from the previous month. The business activity index for the retail and catering industries increased to varying degrees from the previous month, while the business activity index for the postal, cultural, sports, and entertainment industries was above 55.0%, indicating a higher level of prosperity; during the "May Day" holiday, the number of domestic tourism trips nationwide increased by 28.2% compared to the same period in 2019, and the average expenditure per trip increased by 13.5% compared to the same period in 2019; affected by the unexpected increase in demand-side policies in the real estate market, the sales of the top 100 real estate companies increased by 3.4% month-on-month in May, which will drive the growth of consumption of residential goods. However, the seasonal decline in car sales, from May 1st to 26th, the retail sales of passenger cars decreased by 6% year-on-year, and decreased by 2% month-on-month. With the reduction in domestic refined oil prices, the growth rate of consumption of petroleum and related products will slow down.

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Best Forecasting Economists for April 2024 and their May Forecasts (Year-on-Year Total Retail Sales of Consumer Goods):

Wen Bin: 6%

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IV. Industrial Value Added: The forecasted average year-on-year growth rate for May is 5.99%

The survey results show that the forecasted average year-on-year growth rate for the industrial value added in May is 5.99%, with the minimum value of 5.3% given by Zhang Jun from Galaxy Securities and the maximum value of 7% given by Chen Xing from Caitong Securities.

Lu Zhengwei from Industrial Bank believes that in May 2024, there was a divergence in the start-up rates of major industrial products. The profit margin of rebar on the plate slightly rebounded under the combined effects of supply disturbances and improved demand expectations, and the output of crude steel also increased slightly; after "May Day," the start-up rate of tires rebounded to a higher level, with semi-steel tires performing better than full-steel tires; the start-up rate of the PTA industry chain remained high overall but slightly decreased compared to April; the daily consumption of coal turned from positive to negative year-on-year; the real estate data still shows a relatively weak performance. Considering the base number from last year, it is expected that the year-on-year growth rate of industrial value added in May will decrease by 1.2 percentage points compared to the previous month.April 2024 Best Forecasting Economists' May Forecasts (Industrial Value Added Year-on-Year):

Shuang Ding: 5.8%

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V. Fixed Asset Investment Growth Rate: Forecast Average of 4.13%

Economists' forecast average for the growth rate of fixed asset investment in May is 4.13%, slightly lower than the 4.2% published data from the previous month. Among them, Cheng Shi from ICBC International gave the highest value of 4.5%, while Xiong Yuan from Guosheng Securities, Shuang Ding from Standard Chartered Bank, Wen Bin from Minsheng Bank, Xu Sitao from Deloitte China, Chen Xing from Caitong Securities, Wei Cai from KPMG, Wenlong Li from Huanya Digital Economy Research Institute, and Jun Zhang from Galaxy Securities gave the lowest value of 4%.

Chen Xing from Caitong Securities expects that the investment growth rate in May may fall back slightly. Firstly, the issuance of special bonds in May has accelerated, and from the high-frequency data related to infrastructure construction, the year-on-year growth rate of petroleum asphalt operation rate has narrowed, indicating a slight recovery in infrastructure investment. Secondly, with the continuous optimization of real estate regulatory policies in various regions, real estate investment may stabilize. Lastly, with the support of policies promoting large-scale equipment updates, the growth rate of manufacturing investment is expected to remain stable.

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April 2024 Best Forecasting Economists' May Forecasts (Cumulative Year-on-Year Growth Rate of Fixed Asset Investment):

Lu Zhengwei: 4.2%

Lu Ting: 4.3%Six, Real Estate Development Investment: The forecasted average growth rate for May is -9.74%

Survey results indicate that the forecasted average cumulative growth rate for real estate development investment in May is -9.74%. Among the economists participating in the survey, Xie Yaxuan from China Merchants Securities gave the highest value of -9%, while Xiong Yuan from Guosheng Securities, Lian Ping from Guangkai Chief Industry Research Institute, Wen Bin from Minsheng Bank, Xu Sitao from Deloitte China, and Lu Ting from Nomura International provided the lowest value of -10%.

Li Wenlong from Huanya Digital Economy Research Institute stated that the effects of real estate relaxation measures are expected to gradually take effect starting from May. However, considering the overall excess supply, the recovery strength of the real estate sector is limited.

2024 April Best Forecasting Economist May Forecast (Cumulative Year-on-Year Growth Rate of Real Estate Development Investment):

Lian Ping: -10%

Seven, Foreign Trade: The published trade surplus data for May is $82.6 billion

According to the customs data released by the General Administration of Customs on June 7th, in May, China's exports were valued at $302.4 billion, with a year-on-year growth rate of 7.6% and a cumulative year-on-year growth rate of 2.7%; imports were $219.7 billion, with a growth rate of 1.8% and a cumulative year-on-year growth rate of 2.9%; the trade surplus was $82.6 billion.Guosheng Securities' Xiong Yuan stated that the export growth rate in May showed a significant rebound compared to the same period last year, which diverged from the trend of new export orders in the PMI. Specifically, exports in May grew by 7.6% year-on-year, higher than the previous value of 1.5%, and increased by 3.5% month-on-month, which was weaker than the seasonal pattern (the average month-on-month growth rate from 2014 to 2023 was 5.4%). The rebound in the year-on-year export growth rate in May was mainly supported by the decline in the base figure (exports in April and May 2023 grew by 7.1% and -7.6% year-on-year, respectively), and the resilience of external demand and the alleviation of the drag from export prices also provided additional impetus; the decline in new export orders in the PMI may be related to short-term disturbances such as rising shipping prices. Historically, the correlation between new export orders in the PMI and year-on-year export growth is only 0.36, and monthly fluctuations may not be over-interpreted. It is expected that the resilience of exports will likely continue to be relatively strong within the year, with the base case scenario suggesting a year-on-year export growth of 3% to 4% for the full year.

VIII. New Loans: The forecast average for May is 1,252.67 billion yuan

Influenced by seasonal factors, economists predict that the new loans for May 2024, which will be announced this week, will rebound from the previously announced value for the previous month (73 billion yuan) to 1,252.67 billion yuan. In the survey, the minimum value of 81 billion yuan came from Xieyaxuan of China Merchants Securities, and the maximum value of 180 billion yuan came from Ding Shuang of Standard Chartered Bank.

Chen Xing from Caitong Securities said that since May, the pace of government bond issuance has accelerated, and the net financing amount of corporate bonds has also shifted from a year-on-year decrease to an increase. The bill rate has fluctuated and remained flat. Overall, the demand for financing has improved marginally. He expects that the new credit scale for May may be around 1.6 trillion yuan.

IX. Total Social Financing: The forecast average for May is 218 billion yuan

Survey results show that the forecast average for total social financing in May is 218 billion yuan, higher than the data released by the central bank for April (-2 billion yuan). Among them, Ding Shuang from Standard Chartered Bank gave the maximum value of 320 billion yuan.

Lu Zhengwei from Industrial Bank believes that in terms of social financing, the growth rate of social financing in May may rebound slightly with the support of government bonds. Looking at government bonds, the pace of local government bond issuance accelerated in the last week of May, and the net financing scale of government bonds for this month is expected to exceed 100 billion yuan. Combining this with the credit scale, the new social financing for May is expected to be 253 billion yuan, with a corresponding year-on-year growth rate of social financing of 8.6%.

X. M2: The forecast average growth rate for May is 7.37%

Economists predict that the year-on-year growth rate of M2 in May will rebound to 7.37% from the level announced by the central bank for April (7.2%). Among them, Chen Xing from Caitong Securities gave the maximum value of 8.2%, and Lu Zhengwei from Industrial Bank gave the minimum value of 6.7%.

Zhang Jun from Galaxy Securities stated that according to the M2 derivation forecast, credit derivation is about 84 billion yuan, fiscal net investment derivation is 20 billion yuan, foreign exchange derivation is about -2 billion yuan, and bank purchases of corporate bonds derivation is 3 billion yuan. Due to the downward trend in deposit interest rates and the impact of prohibiting manual interest supplementation, which leads to the flow of bank deposits to wealth management products, this part of the impact may be about -100 billion yuan. Taking into account the above factors, it is expected that M2 may increase by about 5 billion yuan in May, with a decline in growth rate.Eleven, Interest Rates & Reserve Requirement Ratio: The possibility of a reserve requirement ratio cut in June is relatively small

In this survey, among the 12 economists who provided forecasts, two estimated that there might be a possibility of a reduction in the one-year and five-year LPR interest rates in the next month, while the remaining 10 economists believed this possibility to be relatively small. In addition, except for one economist, the rest of the economists also expected that the possibility of changes in the reserve requirement ratio for large financial institutions during the same period would also be relatively small.

Lian Ping from the Chief Industry Research Institute of Guangkai stated that the direction of monetary policy will remain prudent and slightly loose, continuing to create a good monetary and financial environment for the economic recovery. The possibility of another reserve requirement ratio cut in the second half of the year is not ruled out, and it is expected that the second cut may be mainly targeted; there is room for a 10-20BP decrease in the MLF, and the LPR may still be adjusted accordingly.

Twelve, Exchange Rate: The expected average mid-rate of the RMB against the US dollar at the end of 2024 is 7.03

On May 30, 2024, the mid-rate of the RMB against the US dollar was 7.1111. Economists expect that the mid-rate of the RMB against the US dollar will remain stable in June, with their average forecast for the RMB against the US dollar exchange rate at the end of June being 7.1. At the same time, they have adjusted their expectations for the RMB against the US dollar exchange rate at the end of the year to 7.03.

Thirteen, Official Foreign Exchange Reserves: The value announced at the end of May is $3,232 billion

Statistical data from the State Administration of Foreign Exchange shows that, as of the end of May 2024, China's foreign exchange reserves were $3,232 billion, an increase of $31.2 billion from the end of April, a rise of 0.98%.

Wen Bin from Minsheng Bank stated that in May, signs of a slowdown in the US economy emerged, with manufacturing PMI, consumption, employment, and other data falling more than expected, and market expectations for a Federal Reserve rate cut heated up again. Against this backdrop, the US dollar exchange rate index (DXY) fell by 1.5% to 104.7, and major non-US dollar currencies all rose, with the yen, euro, and pound appreciating against the US dollar by 0.3%, 1.7%, and 2.0%, respectively. Global financial asset prices generally rose, with the 10-year US Treasury yield falling by 18 basis points month-on-month to 4.51%, the dollar-denominated hedged global bond index rose by 0.9%, and the S&P 500 stock index rose by 4.8%. Considering the impact of exchange rate conversion and changes in asset prices, the foreign reserves at the end of May increased by $31.2 billion from the previous month to $3,232 billion.

Fourteen, Policy

Cai Wei from KPMG believes that in the next phase, fiscal policy is expected to expand further, and monetary policy may work in concert. Following the Politburo meeting on April 30, which clearly stated "to issue and use ultra-long-term special government bonds early, and to accelerate the issuance and use of special bonds," special bond issuance has accelerated since May, with the issuance of trillion-yuan ultra-long-term special government bonds beginning, and the intensity of fiscal expenditure is expected to stabilize and rebound, and the fiscal stimulus effect on domestic demand may become apparent. In addition, according to the first-quarter monetary policy implementation report, future monetary policy goals will place greater emphasis on the rise in inflation and exchange rate stability. The timing of interest rate cuts in major developed economies such as the US and Europe still has uncertainties. To balance inflation and the exchange rate, compared to interest rate cuts to support credit expansion, the subsequent monetary policy orientation will focus on coordinating with fiscal policy. As the supply pace of fiscal bonds accelerates in the following months, the central bank may cut the reserve requirement ratio to support it.Wu Ge from Changjiang Securities stated that there should be continued "implementation of the already determined macro policies," but the actual interest rates and the broad fiscal deficit ratio do not change significantly, indicating that the macro policy stance remains relatively strong. The cancellation of the lower limit on mortgage interest rates and other measures are mainly aimed at "risk prevention" in the real estate sector, and future larger interest rate adjustments will still depend on the overall policy intention of "stabilizing growth." Under the premise of emphasizing principles such as "further standardizing the operation of fiscal power," although there are signs of marginal acceleration in the issuance of special bonds, the short-term progress may still be relatively moderate.

Fifteen, Hot Issues in Macroeconomics

Recently, the State Council has introduced a series of significant real estate optimization policies. Chief economists believe that these policies will work together on both the supply and demand sides, and the short-term real estate sales market may see marginal improvement. However, in the medium term, the downward trend in the real estate market may be difficult to fundamentally change, and there is still room for future real estate policies.

Xu Sitao from Deloitte China said that since April of this year, policy support for real estate has accelerated, aiming to solve problems from both the supply and demand sides. On the demand side, many first and second-tier cities have recently relaxed purchase restrictions. On the supply side, the Politburo meeting on April 30 emphasized the need to "effectively ensure the delivery of houses," which means that developers who promise to ensure the delivery of houses need to obtain sufficient financing.

Cai Wei from KPMG believes that this round of real estate policy "combination punches" have worked together on both the supply and demand sides and have basically reached the most relaxed state in history. It has opened up policy space for high-energy cities, which is conducive to promoting the release of housing demand and activating real estate market transactions; accelerating the inventory reduction of existing commercial housing, enhancing the ability of real estate companies to recover funds, and preventing liquidity risks for real estate companies; stabilizing housing prices and residents' expectations. However, against the current background of continued pressure on residents' employment and income growth expectations, and insufficient willingness to leverage, the extent and duration of the stimulating effect of this round of new policies on the real estate market recovery still need to be observed and evaluated.

Cai Wei stated that the relaxation of real estate policies in this round may have a limited impact on driving real estate investment. On the one hand, affected by the acceleration of population aging and the slowdown of urbanization, the demand for real estate is on a long-term downward trend. The release of short-term suppressed demand may not be able to be transformed into a new round of investment for real estate companies. On the other hand, the 300 billion yuan guaranteed housing re-loan tool established by the central bank has a relatively short term and a relatively small amount of funds. Coupled with the government's plan to repurchase existing new housing at low prices, the final cash flow that real estate companies can obtain from policies is relatively limited. Looking at the subsequent policy space, on the demand side, localities will accelerate the implementation of requirements to reduce down payments and interest rates, and first-tier cities will further relax purchase restrictions; increase the promotion of the new model of "old for new" housing. On the supply side, if the real estate collection is successfully advanced, it may further increase the quota of guaranteed housing re-loans, and the strength of "quasi-fiscal" funds such as PSL is expected to be increased. In addition, there is also room for further adjustment in the field of fiscal and tax support, such as preferential policies for housing purchase taxes and deductions for individual income tax housing loans.

Xiong Yuan from Guosheng Securities believes that considering the current overall environment of continuous decline in residents' income expectations, housing price expectations, and willingness to buy a house, even if credit constraints are relaxed, residents may still find it difficult to significantly leverage to buy a house. In other words, this round of policies will help to slow down the downward slope of real estate, but it may be difficult to fundamentally reverse the trend. The real stabilization of real estate still needs "to exchange time for space." Subsequently, it is highly likely that cities such as Beijing, Shanghai, Guangzhou, and Shenzhen will further relax purchase restrictions, and the mortgage interest rate (5-year LPR) is also expected to be further reduced. The possibility of a significant increase in short-term policies to digest existing housing, such as government collection and old for new, is not high, and the actual implementation also faces constraints such as benefit balance and funding sources.

Chen Xing from Caitong Securities believes that the strength of this real estate stimulus policy is not small. First, in terms of the variety and quantity of tools, it is better than before. This round of stimulus policies, on the basis of reducing down payments and interest rates, also comprehensively includes real estate "old for new," the collection of existing housing, and other measures to accelerate the exploration of a "new model" for real estate development. Second, from the perspective of interest rates, the cancellation of the loan interest rate lower limit is equivalent to reducing the lower limit to 0, with a decline of nearly 400 basis points, and the interest rate for housing provident fund loans has also reached a historical low. Finally, the down payment ratio that has been reduced at the same time has also reached a historical low. From historical experience, the reduction of the interest rate lower limit is the fastest to take effect, and the growth rate of commercial housing sales volume has a significant increase in the month when the policy is introduced; the policy effects of reducing the down payment ratio and reducing the provident fund loan interest rate are the most significant within the next three months, and most of them also increase within the next six months. This time, the cancellation of the interest rate lower limit, the reduction of the down payment ratio, and the reduction of the provident fund loan interest rate are all introduced at the same time, and the short-term commercial housing sales volume is expected to see marginal improvement. It is expected that cities with relatively strict purchase restrictions, such as first-tier cities, may continue to optimize purchase restriction policies and further reduce down payment ratios, mortgage interest rates, etc.

Wang Han from Xingye Securities believes that the recent real estate optimization policies may have the following impacts: boosting housing consumption demand, revitalizing existing housing, promoting market stability, and supporting steady growth of credit; helping real estate demand to return to a reasonable level and preventing the risk of over-adjustment in real estate; enhancing the public's confidence in real estate; further implementing the residential attribute of real estate and promoting a new model of real estate development. The potential policy space that may exist in the future mainly includes: optimizing fiscal and tax policies, especially for guaranteed housing; increasing support for reasonable financing of real estate companies to support them in delivering buildings and providing high-quality housing; continuing to strengthen the construction of the guaranteed housing system and promoting the continuous implementation of the three major projects; and implementing policies according to the city.

Li Wenlong from the Huanya Digital Economy Research Institute believes that the series of real estate relaxation policies introduced by the State Council and local governments are expected to take effect in the near future, increasing transaction volume and reducing inventory. However, considering the overall oversupply in the housing market, a significant rebound in real estate is difficult to appear. Maintaining the stable development of the real estate market requires further comprehensive measures, including effective population policies, such as providing step-by-step housing ticket subsidies for families with children, further promoting urbanization, and further canceling purchase restrictions.Lian Ping, Chief Researcher at the Guangkai Chief Industry Research Institute, stated that overall, the policy support for the real estate sector is quite strong. After many years, the regulatory authorities have targeted housing loan interest rates and down payment ratios, releasing positive signals for a stable housing market through a policy "combination punch." This aims to provide homebuyers with more preferential policies for purchasing homes, hoping to lower the threshold for purchasing homes (by reducing down payment ratios to historically low levels) and to reduce the cost of purchasing homes (with the majority of cities' mortgage interest rates already at historical lows), thereby better meeting the demand for rigid and improved housing needs. The short-term real estate sales market may see marginal improvement. Historically, every strong stimulus policy has led to a concentrated release of housing demand within a relatively short period, especially in large cities with relatively strong purchasing power and demand. The number of inquiries about real estate and transactions is expected to increase in the short term. The medium-term downward trend in the real estate market is difficult to fundamentally change due to insufficient funding supply for developers, which affects the construction, continuation, and "delivery assurance" of real estate projects, and the downward pressure on real estate investment remains significant. There is still room for future real estate policies. From the demand side, there is room for personal commercial housing mortgage loan interest rates to further decrease in line with the LPR, and some large cities still have policy space to lift purchase restrictions; from the supply side, tools to support the liquidity of real estate companies include not only increasing development loans and expanding the issuance of real estate company bonds but may also be brewing innovative financing plans for the deleveraging of real estate company debt, such as the establishment of a National Real Estate Stability Fund. These policies will help to systematically "reduce the burden" on the real estate and financial industries, while improving related expectations and strengthening market confidence.