Chinese Gov’t Asks Top Banks to Provide Over US$84 billion to Rescue Real Estate Sector

• Kongleaphy Keam
• 4 October 2022
• International News
• 2168 Views

China’s financial regulators have asked its six largest banks to provide 600 billion yuan (US$84.32 billion) of financial support in any form including mortgages, loans to developers, and purchases of their bonds, to help recover the real estate sector.

Bloomberg News reported on 30 September that this is the latest scheme after a series of actions implemented by the Chinese government to help rescue the real estate sector from overindebted developers.

According to the report, those banks include Industrial & Commercial Bank of China Ltd., China Construction Bank Corp, PBOC, CBIRC, ICBC, and China Construction Bank.

China’s investment property investment dropped by 7.4% y-o-y in the first eight months of 2022, a further decrease of 1% in the first seven months. (Read more)

According to the National Bureau of Statistics (NBS) report, the total property investment in this period was 9.08 trillion yuan (US$1.31 trillion).

One of the causes of the real estate downturn in China is the debt crisis of large developers such as Evergrande.

Recently, China Evergrande has vowed to restart construction of all frozen property projects by the end of September, prompting a response to the nationwide mortgage boycott.

Meanwhile, the Chinese government also plans to issue 200 billion yuan (US$29 billion) in special loans to help developers finish their stalled housing projects, according to Caixin. (Read more)

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