Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 932

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 932
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 sales, aided by lower mortgage costs. Excessive indebtedness of local investment vehicles constrains the delivery of urban infrastructure projects. Exports will remain weak amid sluggish global growth. Consumer price inflation will remain very low, though sustained deflation is unlikely. A deeper correction in the real estate market is a key risk. Trade sanctions may disrupt production at some high-tech manufacturers. Monetary policy should remain supportive, with further interest rate and reserve requirement cuts as needed. The widening of the interest differential with other economies has led to capital outflows and a currency depreciation. Fiscal policy could provide more support for the debt resolution of financing vehicles, in addition to the planned shift in the composition of spending towards infrastructure and urban village reconstruction. Deductions and exemptions of taxes and charges for targeted groups will provide some support. The anticipated stabilization of the housing sector will bring about a rebound of budgetary revenues at the local level. Growth bottomed out in the third quarter, following a moderate recovery after the re-opening and weaknesses in the first half of the year. Property investment is still decreasing at a steady rate and weighing on growth. Infrastructure investment has been growing at a steady, but low, rate due to financing constraints, and manufacturing investment ____________ 3International Monetary Fund, World Economic Outlook Update,January 2024. 4Organization for Economic Co-operation and Development, OECD Economic Outlook, Volume 2023 Issue 2: Preliminary Version,2023. Annex D-2-2 is being held back by lower capacity utilization rates. Consumption growth is stable but is being constrained by relatively high unemployment as many graduate students entered the labor market this year. Weak demand in some key export markets is weighing on export growth, but a very limited recovery of tourism imports is helping to maintain the current account surplus. The Chinese economy was spared from inflation stemming from soaring global energy and food prices as its food self-sufficiency rate is high and it has substituted some crude oil imports with discounted oil from Russia. More recently, falling energy prices have supported energy imports. Productivity improvements and innovation help to keep overall inflation low, even if food prices have increased. High unemployment, subdued wage growth and low demand are also contributing to low inflation. Monetary policy continues to support the recovery and ensure adequate liquidity. The benchmark lending rate and the ratio of reserves to be kept at the central bank have been cut multiple times. The effective mortgage lending rate is being driven down by the new mortgage rate adjustment mechanism introduced in early 2023, which allows local authorities to remove the mortgage interest floor in