China says it will assist real estate projects with reasonable financing but will not support developers that are facing insolvency.
Minister of Housing and Urban-Rural Development Ni Hong spoke on Saturday at a news conference on the sidelines of the National People’s Congress in Beijing.
He said a total of about 27 billion dollars of financing had been approved by the end of February for developers based on their projects.
But he said in accordance with law, the government will make developers pay the price for hurting the public interest, pointing to those facing insolvency. He added that such firms should be declared bankrupt or undergo restructuring according to market principles.
Major developer Evergrande Group was issued a liquidation order by a court in Hong Kong. Another major developer, Country Garden, faced a liquidation petition filed by its creditors with a Hong Kong court.
The real estate market accounts for about one-fourth of China’s GDP. Observers say the government is hoping to stabilize the currently stagnant market through the shakeup policy.