The Chinese communist regimeās central bank recently made a historic cut to Chinaās loan prime rate in an effort to stimulate the property market during a sluggish economy. Despite this move, the Chinese public, still reeling from a recent stock market crash, remains skeptical about investing in real estate. On Feb. 20, the central bank announced a 25 basis points cut to the long-term loan prime rate for loans with maturities of more than 5 years, bringing it down to 3.95 percent.
This adjustment marks the largest interest rate cut since the LPR pricing model was implemented in October 2019. Experts like Xie Yifeng of the China Urban Real Estate Research Institute view this as an āunprecedented rescue moveā that could signal a turning point for the property market. Zhang Dawei, chief analyst at Zhongyuan Property in China, predicts that mortgage interest rates will remain at historic lows for the next three years, particularly affecting first- and second-tier cities.
Despite these optimistic projections, many Chinese citizens see the experts as biased towards special interests within the ruling communist party. Some believe that the so-called royal experts are not to be trusted. This sentiment is echoed by netizens who feel that the governmentās continued efforts to cut loan interest rates will only serve special interests while the wealth of ordinary people continues to shrink.
Some experts, like private entrepreneur Cao Dewang, caution against taking on excessive mortgage loans, warning of the risks involved in the real estate market. Others, like Wang Guo-chen from The Chung-Hua Institution for Economic Research in Taiwan, believe that the interest rate cut is an attempt to stimulate real estate and stock markets amid a continued economic slowdown. However, many are doubtful that these measures will have a significant impact on investor confidence or consumer spending.
The Chinese stock market’s decline, coupled with state intervention measures like banning short selling, has further eroded trust in the economy among investors and consumers. The CCP’s leader Xi Jinping’s decision to ban short selling at the opening and closing bells on the first day of trading after the Chinese New Year holiday only adds to the uncertainty. And amid all these economic challenges, Chinese citizens feel trapped, with their funds tied up in a volatile stock market with little hope for significant recovery in the near future.