China is capable of effecting more measures to boost market confidence in property developers' liquidity and credit, thereby reversing the downward pressure on the Chinese economy from real estate and further
He said he expects both the GDP growth target for the year and the actual figure to be around 5 percent, as economic performance in 2024 will likely be better than last year's.
The 2024 GDP growth target is expected to be unveiled during the upcoming two sessions, or the annual sittings of the nation's top legislature and top political advisory body, in the first half of March.
Xu made the remarks while scotching some views expressed in Western media that China's economic growth has peaked and the country will likely go Japan's way. In the 1990s, Japan had seen its real estate bubble burst.
"I expect the government to roll out more adjustment policy measures to safeguard traditional growth drivers, especially the real estate, to ensure the stable fundamentals of the Chinese economy," Xu said, adding he believes the Chinese economy will realize relatively high-speed growth as well as its high-quality development goals, on a solid base of stable economic fundamentals and growing new supplies from new productive forces.
"While seeking more new growth points from emerging sectors or new productive forces, the country is wise to stabilize key traditional industries, especially real estate, to stabilize demand," he said, adding such an approach also underpins the new policy tone of "establishing the new before abolishing the old", stipulated in the annual Central Economic Work Conference in December.
"Since the second half of last year, a myriad of adjustment measures have been adopted in China to stimulate the development of the real estate industry. These included reducing purchase restrictions and lowering mortgage rates. But their effectiveness has been less than expected as they mostly targeted the demand side rather than the supply side in the real estate industry," Xu said.
"Key adjustment moves for the next stage can focus on significantly easing financing bottlenecks and increasing financing for developers, to effectively resolve credit risks facing developers and then boost market confidence to enable the industry to recover and expand," he said. Otherwise, more real estate projects will likely encounter financing and housing delivery problems.
He suggested that China should set aside special relief funds for real estate, buying stocks and bonds of key developers. Such moves will rebuild confidence of investors and homebuyers, to eventually ease liquidity stress in the industry, he said.
Xu also said China is fully capable of avoiding the kind of experiences that bedeviled Japan in the '90s, despite similar challenges like tepid demand and wavering market confidence amid lingering real estate downturn.
"China has also developed a unique development model of combining government functions with market forces well, to let the government play its positive role to the full extent when market fails to ensure long-term stable economic growth."
To tap the potential of new productive forces, China can adopt policies to support specific industries as well as ensure stable economic fundamentals so that the private sector will have stable macro conditions to expand investment, he said.
Data from the People's Bank of China showed that both China's new yuan-denominated loans and total financing to the real economy in January hit all-time highs of 4.92 trillion yuan ($683.9 billion) and 6.5 trillion yuan, respectively.
