China’s property sector has been grappling with a liquidity crisis since mid-2021, with major developers defaulting on or delaying debt payments following a regulatory crackdown on high leverage.
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Anger mounts as China’s property debt crisis leaves flats unfinished
Anger mounts as China’s property debt crisis leaves flats unfinished
“It also needs to be emphasised that for real estate companies that are seriously insolvent and have lost their operating capabilities, they must go bankrupt and be restructured in accordance with the principles of the rule of law and marketisation,” Ni said.
“Those who commit acts that harm the interests of the masses will be resolutely investigated and punished in accordance with the law, and they will be made to pay the due price.”
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China real estate woes: Evergrande files for bankruptcy protection in New York
China real estate woes: Evergrande files for bankruptcy protection in New York
Ni said that to deal with a funding crunch in the sector, his ministry and the National Financial Regulatory Administration unveiled a plan in January to establish a mechanism to better coordinate with financial institutions to help real estate projects.
According to the minister, the mechanism is up and running in more than 310 cities in 31 provinces across the country to support developers.
As of the end of February, over 200 billion yuan (US$27.8 billion) in bank loans had been approved.
Chinese home sellers turn to social media to boost their chances in weak market
Chinese home sellers turn to social media to boost their chances in weak market
State news agency Xinhua reported last month that local governments and financial institutions, including Bank of China, China Construction Bank, Agricultural Bank of China, Postal Savings Bank of China and some joint-stock banks, had been actively implementing such coordination mechanisms.
In his annual government report last week, Premier Li Qiang said China would also quicken the development of a new model for the property sector, focusing on building more affordable housing and meeting a range of demands for homes.
But Ni insisted that the new model would comply with the official line that “housing is for living in, not for speculation”.
“China will focus on planning and building affordable housing, and advancing the construction of public infrastructure for both normal and emergency use and the redevelopment of villages in cities,” he said.