China’s latest effort to prop up its battered housing market and spur the economy is getting a poor reception. The measures are underwhelming and unlikely to achieve much beyond improving Beijing’s chances of meeting its already restrained growth ambitions.
That is damning the initiative with faint praise. The deeper problem lies in how China measures economic success. The government itself deserves some blame: It doesn’t aspire to beat expectations, merely to meet them. And those expectations are set at the start of each year with the much-heralded unveiling of an economic growth target. China should jettison it.
The negative reception for the real estate package, which includes subsidized loans and support for favored sectors, helps explain why a change of approach would be beneficial. Chinese leader Xi Jinping has been trying to nurse the property market back to health for years, with limited success. There’s nothing wrong with experimenting when existing remedies aren’t working. Washington tried repeatedly to contain the subprime crisis in 2007-2009. Several measures proved inadequate before policymakers eventually restored confidence.
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