Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 933

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 933
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 cities where new housing prices decrease for three consecutive months. More recent measures, such as facilitating there negotiation of rates on outstanding loans, also work in that direction. This reduces households’ debt service burden. The realized savings on debt payments are expected at least partly to be channeled to consumption. More stringent implementation of credit quotas for presold housing, lower provident fund lending rates for first-time buyers, the broadening of the definition of first-time buyers and other measures will help stabilize the property sector and allow adjustments to continue in an orderly manner. Fiscal policy will continue to provide support through tax cuts and exemptions for small and micro enterprises and accelerated deductions of research costs. Special treasury bonds of CNY 1 trillion, or around 0.8% of GDP, will support growth in 2024. The issuance of refinancing bonds by several local entities is expected to reduce the pressure on heavily indebted local investment vehicles and help implementation of planned infrastructure projects. While this may provide short-term relief, the problem of implicit debt at the local government level needs to be addressed effectively and in a timely manner. Urban village redevelopment will be a focus of the coming infrastructure drive, with urban infrastructure provision in large swathes of land in the middle of cities and improvements of intra-city connections. This will boost productivity, upgrade the residence status of the inhabitants of those areas and clarify land rights, with potential improvements in living standards. Following a moderate rebound after the re-opening, the Chinese economy will return to its gradually slowing path, with 4.7% growth in 2024 and 4.2% in 2025, due to unfavorable demographics and slowing trend productivity growth. The on-going adjustment in the real estate sector will continue to weigh on residential investment and related consumption. Infrastructure investment will pick up, as the debt and financing issues of investment vehicles at the local level are resolved, due to high needs arising from the green transition, urban village redevelopment, and other environmental and social targets. Consumption is expected to remain sluggish given weak confidence and the lack of reforms to strengthen the social safety net. Tourism imports may not recover to pre-COVID levels. By moving up the value chain, China will reduce its reliance on imported parts and components and thus, even amid weak foreign demand, the current account surplus will remain high. Overall risks are tilted to the downside. Potential further defaults may disrupt orderly adjustment in the real estate sector. Excessive relaxation of demand-side restrictions in the property sector may result in stronger growth but also a further build-up of imbalances and