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Staff reporter and agencies

China’s A-share market closed higher on the first trading day of the Year of the Dragon despite disappointing home sales and investment data.

The Shanghai Composite Index rose 1.6 percent to 2,910 points and the Shenzhen Composite Index added 1.7 percent.

This came as China’s state-owned lenders earmarked at least 60 billion yuan (HK$65 billion) in loans for property projects eligible for support, as the country’s new home sales in 10 key cities including Beijing and Shanghai dropped to a five-year low during the Lunar New Year holiday.

Agricultural Bank of China (1288) approved more than 40 billion yuan in loans for real estate projects on white lists, the lender said in a statement yesterday. China Construction Bank Corp (0939) extended 3 billion yuan to five property projects, with more than 20 billion yuan of approved loans in the pipeline, it said late Friday.

Local branches of the Industrial and Commercial Bank of China (1398) and Bank of China (3988) also moved to offer financing support to some projects, according to statements over the weekend. They didn’t reveal the total amount of loans that had been extended or are being planned.

Data from the Zhuge real estate data research center showed that the average number of daily transactions for new homes during the eight-day holiday in 10 mainland cities dropped 13.6 percent from a year ago. A separate report that tracked 44 cities in China also found a 44 percent drop in weekly transaction volumes in the primary market during the same period.

This came as foreign businesses’ direct investment into China last year increased by the lowest amount since the early 1990s, underscoring challenges for the nation as Beijing seeks more overseas funds to help its economy.

China’s direct investment liabilities in its balance of payments stood at US$33 billion (HK$257.4 billion) last year, according to data from the State Administration of Foreign Exchange.

That measure of new foreign investment into the country – which records monetary flows connected to foreign-owned entities in China – was 82 percent lower than in 2022 and the lowest since 1993.

In other news, US Treasury undersecretary for international affairs Jay Shambaugh expressed concerns about China’s plan to flood the international market with its goods to address overcapacity issues, adding that the US may take actions to deal with it.

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