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China’s stimulus measures aim to revive economy & boost lumber demand

China’s stimulus measures aim to revive economy & boost lumber demand

Posted on October 29, 2024   |  

The Chinese government recently announced stimulus measures to boost the sluggish economy and support the struggling real estate sector.

A drop in the real estate market has reduced China’s demand for new construction this year, leading to lower softwood lumber consumption and imports.

The real estate sector in China has contracted for three years, contributing to the decline in lumber demand.

In 2023, China reduced mortgage rates by 50-100 basis points to attract new borrowers, but most existing mortgages, which account for 80% of housing purchases, still have rates above 4%.

Last month, the People's Bank of China introduced measures to stabilize the housing and stock markets, including a cut in the reserve ratio for banks and a decrease in down payments for homebuyers from 25% to 15%.

China’s softwood lumber imports fell to 11.7 million cubic meters through August, a 6% decrease from last year, while Canadian exports dropped by 3%.

While total Chinese imports increased by 4% in 2023 compared to the previous year, the slowdown in the construction sector weakened this momentum, leading Canadian producers to consider boosting exports to China instead of the U.S. market.



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