China Eases FX Restrictions in the Housing Market

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China’s foreign-exchange regulator has introduced new measures to ease rules on cross-border investment and financing, Bloomberg reports. The initiative aims to deepen market reforms and boost foreign investor interest in the country.

The regulator removed restrictions on the use of foreign-currency proceeds in capital accounts for companies to purchase housing not intended for self-occupation. At the same time, it relaxed requirements for real-estate transactions overall, allowing foreign nationals to settle deals at earlier stages. These steps replace previously imposed barriers intended to curb speculative “hot money” inflows into the sector.



The State Administration of Foreign Exchange stressed that conditions in the property market have changed and macro-regulation for the sector has been adjusted—measures designed to support stable market development. The decision comes amid an accelerated decline in secondary-home prices in recent months, despite looser purchase curbs in top cities.

Beyond real estate, the regulator scrapped requirements to register pre-expenses and reinvestments, and allowed foreign companies to use FX profits for onshore investments. Quotas for external borrowing were also increased for high-tech firms to support growth in a strategically important sector.

China’s housing market has been in a prolonged downturn for more than four years: sales have fallen since the end of Q2 2025, with no clear signs of recovery. According to Bloomberg Economics, in the second half of August the broader economy also slowed more than expected. The decline hit all key indicators, strengthening expectations of new stimulus to meet the official GDP growth target.



Official data show industrial output rose just 5.2% year-on-year—the weakest since August 2024. Retail sales grew 3.4% versus 3.7% a month earlier. Fixed-asset investment for January–August nearly stalled, up only 0.5%, the worst reading for the period since 2020. The slowdown pushed 30-year government bond yields down to 2.17% on expectations of PBOC rate cuts, while equities saw the CSI 300 up 0.9% by midday.

Economists note GDP growth could come in near 5% for Q3, but base effects from 2024 stimulus may drag Q4 lower, threatening the 5% full-year target. Mizuho Securities Asia says the sharp slowdown in investment— including in pharmaceuticals, machinery, and chemicals—signals structural problems rather than temporary swings.

Home prices, sales, and investment also fell in August. Infrastructure projects—traditionally a growth pillar—added only 2% in the first eight months. Manufacturing investment is losing momentum as the impact of equipment-upgrade subsidies fades.



Beijing faces twin pressures: domestic risks combined with external ones, including tariff tensions with the U.S. Trade talks are taking place as the 90-day tariff truce expires in November. Bloomberg Economics analysts argue that two consecutive months of weak data confirm that China’s downturn is structural. Complicating matters are “anti-involution” policies aimed at cutting overproduction and excessive competition, which have reduced output of steel, copper, and coal—already weighing on jobs and consumption.

Economists forecast authorities may accelerate new stimulus in Q4, though discussion so far points to cautious adjustments. According to Union Bancaire Privée, conditions “may worsen before they improve,” threatening further earnings downgrades and posing risks to the fragile equity rally.