Property prices defy curbs, PBOC props up the RMB

One bright spot in the generally downbeat economic data released this week was a further acceleration in property sales and prices last month. The pick-up was driven by China’s smaller cities, where demand has been propped up by the shantytown redevelopment scheme. With the government now cracking down on shantytown compensation payments though, we think the property market will probably lose some steam over the next few months. Meanwhile, the renminbi has recovered over the past couple of days as the PBOC has increased official intervention.