QUICK PICK: A machine harvests cotton in Korla, Xinjiang Uygur Autonomous Region, on October 7 (DU BINGXUN)

Altered Forecast

The World Bank said on October 6 in Singapore that it has cut the growth target forecasts for China to 7.4 percent in 2014 and 7.2 percent in 2015, as China pushes forward structural reforms to address financial vulnerabilities and structural constraints.

"Measures to contain local government debt, curb shadow banking, and tackle excess capacity, high energy demand and high pollution will reduce investment and manufacturing output," said a representative for the bank, regarding China's outlook.

However, Sudhir Shetty, the World Bank's Chief Economist in East Asia and the Pacific Region, claimed that China's slowdown in economy will be gradual and this does not represent the bottom falling out of China's growth. She added that the downward trend in China will not have a dramatic impact on other countries.

The World Bank proposed that China's structural reforms in sectors such as state-owned enterprises and services could help "offset the impact of measures to contain local government debt and curb shadow banking."

As to the property market, the bank said that "a major nationwide correction in real estate prices in China remains unlikely, although there may be pressure on prices in several of the less rapidly growing provinces."

Loosening Credit

Second home buyers in China will face lower down payments due to relaxed restrictions.

Chinese citizens who wish to buy a second home will enjoy the same 30-percent down payment required of first-time home buyers if they have fully repaid their mortgage loans, the People's Bank of China (PBC), the central bank, and the China Banking Regulatory Commission (CBRC) said in a joint announcement on September 30.

Prior to the announcement, second home buyers were required to set down at least a 60-percent down payment.

The move marked a turning point in the nation's restrictive home purchasing policies.

In 2011, skyrocketing home prices forced the government to roll out restrictive measures, such as requiring higher down payments and increasing the lending rate for second home purchases, as well as banning the purchase of a third home.

According to the latest announcement, first home buyers will have access to a maximum 30-percent discount on home loan rates offered by banks, while the minimum down payment remains at 30 percent. The PBC and the CBRC also said that they will require their regional branches to outline supportive home loan measures based on local government requirements.

Unified Trading

Investors on the Chinese mainland can now trade securities through a single account at different brokerages and stock exchanges as the unified account platform—a mechanism designed to integrate different trading systems in the securities markets—was officially initiated on October 8.

As a result, investors can switch among different brokerages without opening new accounts and closing their existing ones. They can also use the platform to operate multiple sub-accounts for different types of securities and investment purposes, according to the China Securities Depository and Clearing Corp. Ltd., a state-owned clearing service company.

Previously, individual investors had to pay separate account fees if they wanted to trade in Shanghai and Shenzhen stock exchanges. Under the new rule, they are only required to pay a one-time fee of 40 yuan ($6.5) in order to trade in the markets.

Analysts said that the reform is likely to attract fresh capital to the stock markets.