Macro Monday:SDR inclusion,A symbolic move

More cities tightened property policy: More and more cities have startedtightening policy for local property markets. In addition to the four tier-1 cities,a dozen tier-2 cities have announced cooling measures recently. Over theweekend, Wuxi, which was described as a “ghost town” by media andinvestors three years ago, also increased the down-payment ratio for 2ndhome buyers. To be sure, we don’t think China has a national property bubble.Rather, the market is highly polarized. According to the NBS, among China’s70 biggest cities, 10 cities saw home prices rising over 20% in the past twelvemonths, while 48 had home price growth less than 5%. Therefore, it doesn’tmake sense to tighten monetary policy at the national level. “One city, onepolicy” is more appropriate. With these tightening measures in place, thesector will likely enter a down-cycle early next year.