Source: Bloomberg

China has the ability to end the housing crisis in one fell swoop at an important policy conference, including the "Big-Bang Solution" involving money printing.But in the end, it may not be shot.

According to Bloomberg's economic research, if the People's Bank of China has a large printed banknote from the Federal Reserve during the global financial crisis, it can provide funds for purchasing about 70%of the housing for sale.

Bloomberg economist David Qu and Shu Chang pointed out that this is a big bang solution that may cause major attachment damage -but think Beijing will not contribute so fiercely.However, we can see the potential of policy solutions.

The Third Plenary Session of

The Third Plenary Session held from July 15th to 18th is one of the most important political conferences of the mainland government.It is expected that the meeting will launch a series of economic reforms and policies, which aims to solve long -term issues that hinder growth and recovery.As the downturn in the property market is still the biggest economic threat, the outside world will focus on real estate policies.

The People's Bank of China announced in May that 300 billion yuan (S $ 55.6 billion) of guaranteed housing re -loan will be established to encourage state -owned enterprises to acquire unattended houses.Bloomberg economists wrote in a report that this model is very promising, but the problem is too serious. So far, it is not enough to solve it.They pointed out that this house is enough to buy less than 1%.

Bloomberg Economic Research analyzes three situations to understand how many banknotes can be printed by the People's Bank of China to help local governments acquire housing to be sold.

If the People's Bank of China expands the balance sheet of about 24 trillion yuan -similar to the scale of the Fed from 2008 to 2014 -it will be able to acquire about 70%of the houses to be sold in China.

If the expansion scale is 13 trillion yuan -similar to the scale after the European Central Bank from 2009 to 2012 -will provide funds for the acquisition of about 40%of house inventory.

Bloomberg Economic Research states that on the other hand, the quantitative easing of this scale will be the rapid rise in debt, the pressure of RMB depreciation, accelerated inflation, and the burden of debt of state -owned enterprises and local governments.