China: Targeted support and cautious stabilization signs – Societe Generale

Societe Generale analysts note China has unveiled targeted support measures, including a 25bp cut to the PBoC’s PSL rate and expanded relending quotas for innovation, technology, agriculture and small businesses. Mortgage subsidies for first‑time buyers of smaller homes were introduced, but these drip‑feed steps failed to excite equities.

Policy easing meets muted market reaction

"In Asia, China unveiled a fresh round of targeted support measures aimed at bolstering growth and stabilising key sectors including property, infrastructure and technology."

"The PBoC lowered the rate on its pledged supplementary lending facility by 25bp, dropping the one-year PSL rate to 1.50% from 1.75%."

"It also expanded relending quotas by CNY200bn for innovation and technology sectors and by CNY500bn for agriculture and small businesses."

"On the housing front, authorities introduced mortgage subsidies of up to five years for first-time buyers of smaller, lower-cost homes."

"Overall, these drip feed measures failed to excite equity markets as they fell well short of the broader measures announced back in September 2024."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)