China's economy needs a boost, but it's struggling because people don't believe home prices will increase. As a result, people aren't borrowing money to buy homes or invest in businesses. The government is hesitant to provide more stimulus because they view their previous program as a failure that led to overheating and speculation. To avoid a worse economic downturn, China needs to convince people that home prices will rise and encourage borrowing. This will help jump-start activity and drive down risk.
