(C/NF) CHINA: KUDOS FOR REPORTING ON CHINA'S

C O N F I D E N T I A L STATE 083582

NOFORN
SIPDIS

E.O. 12958: DECL: 08/11/2034
TAGS: PINR ECON CH
SUBJECT: (C/NF) CHINA: KUDOS FOR REPORTING ON CHINA'S
REAL ESTATE MARKET (C-AL9-01676)

REF: A. SHANGHAI 000291

B. SHANGHAI 000292

Classified By: MICHAEL P. OWENS, ACTING DIR, INR/OPS. REASON: 1.4(C).


1. (C/NF) WASHINGTON ANALYSTS WOULD LIKE TO SEND KUDOS FOR
THE TWO EXCELLENT REF REPORTS ON CHINA'S REAL ESTATE MARKET.
THE OUTLOOK FOR THE PROPERTY SECTOR IS IMPORTANT FOR CHINA'S
ECONOMIC RECOVERY, GIVEN THE LARGE EXPOSURE OF THE BANKING
SECTOR TO THIS MARKET, THE LARGE EMPLOYMENT IN REAL
ESTATE-RELATED BUSINESS, AND THE IMPLICATIONS FOR GOVERNMENT
REVENUE IF THE MARKET COLLAPSES. BOTH REPORTS PROVIDED NEW
AND IMPORTANT INFORMATION THAT WILL HELP US ANALYZE CHINA'S
ECONOMIC AND FINANCIAL STABILITY OUTLOOK, A KEY INTEREST TO
US POLICYMAKERS. DETAILS THAT ARE PARTICULARLY NEW AND
IMPORTANT INCLUDE THE LOCAL GOVERNMENT'S PROGRAMS TO BOOST
THE MARKET, CENTRAL-LOCAL GOVERNMENT SPLITS ON POLICY, AND
WAYS LOCAL GOVERNMENTS OR DEVELOPERS MAY BE TRYING TO FAKE A
RECOVERY. WE ALSO GREATLY APPRECIATE THE ASSESSMENTS OF
CHINESE EXPERTS ON THE OUTLOOK AND POST'S ANALYSIS OF THE
SITUATION ON THE GROUND. ANY FURTHER REPORTING ON THIS TOPIC
WOULD BE HIGHLY VALUED. MANY THANKS.
CLINTON