China’s Minister of Housing:  No Bailouts for Struggling Developers, Some Property Developers Can Go Bankrupt If Necessary

• 20 March 2024
• International News
• 1075 Views

In a pivotal move to address the enduring crisis in China’s real estate sector, the government has unequivocally rejected the rescue of financially beleaguered property developers, emphasising the adherence to market laws and principles. The announcement, reported by NBC New York on 11 March 2024, underscores China’s commitment to rectifying the real estate market’s dysfunction and holding developers accountable for their role in the housing crisis.

China’s Minister of Housing and Urban Development, Ni Hong, articulated the government’s position, stating, “For any real estate company that is in serious bankruptcy and has lost its ability to operate, and if it goes bankrupt, it should go bankrupt or restructure in accordance with market laws and principles.” Hong’s remarks highlight the government’s determination to bring stability to the tumultuous real estate landscape and ensure responsibility among developers.

Addressing concerns about actions affecting the public interest, Minister Hong emphasised strict investigations and legal repercussions, stating, “Anyone who commits an act that affects the public interest will be strictly investigated and punished according to the law.”

The Chinese government’s crackdown on debt-ridden developers began in 2020, resulting in the liquidation of major companies like Evergrande and Country Garden. However, the aftermath saw developers struggling to complete projects, leaving unfinished apartment buildings and disgruntled homebuyers.

While the annual government conference this year focused on investment and high-capacity production, there was a conspicuous omission of the real estate sector from the official discourse. Premier Li Qiang, in a recent government employment report, signalled a shift towards “new development models” for the real estate sector, emphasising accelerated growth, increased housing construction, and improved infrastructure.

• Economy and Finance