CBN丨China’s Shenzhen lowers 2nd home downpayment ratio to 40%

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21世纪经济报道 2023-11-23 19:23:00

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Hi everyone. I’m Stephanie LI.

Coming up on today’s program

Shenzhen relaxed home buying curbs to spur property demand;
2nd Global Digital Trade Expo kicks off in east China's Hangzhou.

Here’s what you need to know about China in the past 24 hours

Shenzhen has become the second Chinese first-tier city to lower the down payment ratio for second-time home buyers, easing its mortgage policy after the central government introduced a series of policies to bolster property sales last year.

The technology hub in southern China connecting Hong Kong will lower the down-payment ratio for second homes to 40 percent from as much as 80 percent effective Thursday, said a notice from the local branch of China’s central bank.

Guangzhou in August became the first top-tier city to adjust the down payment ratio for second-time house buyers, lowering the percentage to 40 percent from at least 70 percent. At that time, industry insiders expected other first-tier cities to follow suit.

The further relaxation of mortgage policy in first-tier cities and the reduction of the down payment ratio will help release the need for apartment purchases to improve living conditions and boost the need for apartment changes, said Yan Yuejin, research director at China Real Estate Information's research institute.

Various Chinese cities have cut mortgages' down payment ratio in response to instructions from the PBOC and the National Administration of Financial Regulation. For example, Chongqing lowered the down payment ratio for second-time home buyers to 30 percent from 40 percent, while Fuzhou and Xiamen cut it to 40 percent from 50 percent.

Beijing and Shanghai, the two other first-tier cities, are the Chinese cities with the highest down payment ratio for second homes, with the percentages standing at between 60 percent and 70 percent, respectively.

The Housing and Construction Bureau of Shenzhen yesterday also adjusted the requirements to classify a house as standard or non-luxury homes that qualify for lower down payments. Now, standard homes only need a floor-area ratio of at least one and a room-building area of no more than 120 square meters or a floor area of up to 144 sqm. The requirement that transaction values must be lower than 7.5 million yuan has been removed.

With these changes, the buyer of an 8 million yuan home in Shenzhen can reduce their down payment by about 3.2 million yuan, according to an analysis by Leyoujia, a local realtor. The measure will likely drive activities in the subdued housing market and boost buyers’ confidence, it added.

China’s home prices fell the most in eight years in October, signaling the property slump is worsening even after the government ramped up efforts to revive demand.

China’s National Development and Reform Commission and four other central departments on Wednesday issued a guidance to accelerate the establishment of a product carbon footprint management system, as part of its larger drive to achieve its carbon peak and neutrality goals. The guidance said that, by 2025, carbon footprint accounting rules and standards for approximately 50 key products will be introduced at the national level. A batch of carbon footprint background databases for key industries will be established and the national product carbon labeling certification system will be basically in place. By 2030, carbon footprint accounting rules and standards for around 200 key products will be enacted at the national level. A batch of carbon footprint background databases covering a wide range of fields, characterized by high-quality data and strong international influence, will be established.
The Chinese Academy of Sciences and the Chinese Academy of Engineering, which represent the country’s highest academic level, have elected a total of 133 new members. The list includes famous scientists such as Zheng Hairong, who led a scientific team to develop a magnetic resonance imaging equipment project that won the first prize of the 2020 National Science and Technology Progress Awards, as well as Yan Ning, structural biologist and fellow of the US National Academy of Sciences who returned home to establish the Shenzhen Medical Academy of Research and Translation last year. This year’s academician elections of the two academies used a new method allowing external experts to join the academicians in selecting the new members. This election resulted in more entries than in previous years.

Moving on to regional highlights

The second Global Digital Trade Expo kicked off in Hangzhou, the capital of east China's Zhejiang Province, Thursday morning, with an eye on global digital trade cooperation. The expo, themed "Digital Trade, Global Access," has attracted 68 international organizations and business associations, as well as over 800 enterprises. With an exhibition area of 100,000 square meters, the second expo has set up a comprehensive pavilion, two special pavilions and four digital industry pavilions. Over 15,000 professional purchasers are expected to attend the event.
China’s inner city railway lines will exceed 10,000 kilometers this year, according to media calculation, as more than 10 metropolises including Beijing and Tianjin, plan to open around 20 rail transit lines before the end of this year. And next year even more will be added. Beijing extended its city railroad network by over 30 km this year, bringing the total to more than 800 km, similar to Shanghai. Chengdu opened 43 km of urban railway, bringing the total to more than 600 km to rank with Guangzhou in the second echelon of intracity track. Next year Chengdu is likely to add seven inner city rail transit lines stretching over 100 km, bringing it to third place nationwide. Shenzhen, Chongqing, Hangzhou and Wuhan all have an inner city rail network of over 500 km and are in the third echelon.

Greater Bay Area, Greater future

The Hong Kong Monetary Authority and the Financial Services Regulatory Authority of the Abu Dhabi Global Market have signed a memorandum of understanding to deepen the partnership on fintech between the two authorities, particularly in the areas of cross-border trade-related data exchange and business collaboration, with a view to further promoting inclusive and innovative financial services leveraging fintech and data in both markets.
Hong Kong will devote about US$30 billion to green transformation over the next 15 to 20 years, according to Financial Secretary Paul Chan Mo-po. Speaking at a forum yesterday, Chan said this climate budget will also boost private sector investment as companies become increasingly aware of the benefits that green practices deliver. He stressed that governments cannot fund all the investments needed for the transformation - Asia will need US$66 trillion in the coming three decades, including US$14 trillion in China - and resources from the private sector must be effectively mobilized.

Next on industry and company news

Jack Ma, co-founder of Chinese tech heavyweight Alibaba didn't sell a single share of the company, and will continue to hold Alibaba's shares, said Jiang Fang, a partner and chief talent officer of Alibaba in the company's internal network on Wednesday, after a regulatory filing last week showed that Ma's family trust plans to sell 10 million US-listed shares of Alibaba. Ma inked the deal with stock brokers earlier this year, but the price set in August was much higher than Alibaba’s current share price, Jiang said.
Chinese smartphone maker Honor said in an internal letter on Wednesday that it will seek to attract persified capital and aim for an initial public offering. Wu Hui, who was chairman of Shenzhen Water Group, will serve as the chairman of Honor, and Wan Biao, the original chairman, will serve as the vice chairman. Honor will adjust the board of directors based on the standards of listed firms and persify its board members to adapt to governance needs and regulatory requirements in the new development stage, the firm said yesterday.
CATL, the world's largest maker of electric vehicle batteries, is reportedly seeking a potential listing in Hong Kong as early as next year. A potential share sale in Hong Kong could come after the battery maker put a plan to sell global depository receipts in Switzerland on hold due to regulatory issues. But it's too early to tell the fundraising size of the Hong Kong listing, sources said.
China's three major telecoms operators, China Mobile, China Unicom, and China Telecom, had 754 million fifth-generation mobile network subscribers by the end of last month. The number of 5G users at the big three carriers has surged by 194 million from the end of last year, according to data released by the Ministry of Industry and Information Technology yesterday. Their share among total subscribers also climbed from 33 percent to 44 percent.
Alibaba Group Holdings's grocery arm Freshippo, also known as Hema Fresh, will open brick-and-mortar shops quicker and enhance the competitive pricing of its goods next year, according to its chief executive officer. Freshippo had its fastest expansion last year, opening more than 60 physical stores, Hou Yi said at a company event yesterday. It will further improve efficiency through re-building vertical supply chain and organizational reforms as strengthening goods' competitive pricing has become its focus, he added, without disclosing how many shops will be opened next year.
Skypeople’s down jackets are not inferior to world-famous brands such as Canada Goose and Moncler in terms of workmanship, fabric and padding, the Chinese garment maker said in response to a social media storm over the price. “Good down jackets need to be filled with enough duck plumage and thus will not be cheap,” Skypeople responded on Tuesday, which charges up to 7,200 yuan for a feather-stuffed trench coat. China-made down jackets are becoming more and more expensive, with Bosideng selling its down jacket collection for 11,800 yuan in 2019 and NetEase’s e-retail arm Yanxuan retailing its padded jackets for up to 1,399 yuan each.

Switching gears to financial news

Trading turnover of the two-year-old Beijing Stock Exchange has renewed a record for the second day in a row after the bourse was reported to accept a second batch of market makers. Securities transactions totaled 13.1 billion yuan on Wednesday, breaking a record of 10.2 billion yuan set in the previous session.

Wrapping up with a quick look at the stock market

Chinese stocks edged higher on Thursday with the benchmark Shanghai Composite up 0.6 percent and the Shenzhen Component adding 0.8 percent. Hong Kong’s Hang Seng index gained 1 percent and the TECH index jumped 2.2 percent.

Biz Word of the Day

The product carbon footprint is a form of carbon emission accounting, which usually refers to the total carbon emissions caused during a product’s life-cycle, from raw material processing, transportation and manufacturing, to sales. It is an important indicator for measuring the green and low-carbon levels of enterprises and products.