FXStreet (Delhi) – Zhiwei Zhang, Research Analysts at Deutsche Bank, suggests that the property sector in China remains in an oversupplied condition, as indicated by a rising level of inventory. Key Quotes “This round of rebound in land sales helps to address economic and fiscal pressure in the short term, but will exacerbate the oversupply problem in the property sector. The policy easing since mid-2015 also led to another undesirable outcome – acceleration of leverage buildup. The growth of credit stock as measured by the total social financial picked up in Q3 to 12.5% yoy from 11.9% in Q2. Based on our estimate this is the first time it rebounded since 2014Q4. The rising leverage in the economy imposes financial risks. The authorities are clearly aware of this, but decided to focus on the short-term growth concern in H2 2015. Given the undesirable side effects of policy easing, we believe the government may switch to a neutral policy stance in Q4 2015 once growth shows signs of stabilization. We expect the effect of policy easing will run out of steam in H1 and growth will then face downward pressure again.” For more information, read our latest forex news.