© Reuters. FILE PHOTO: A building web site that’s being developed by Kaisa Group Holdings is pictured in Shanghai, China, December 7, 2021. REUTERS/Aly Song
SHANGHAI (Reuters) – China is urging massive non-public and state-owned property firms to purchase real estate initiatives from troubled developers to scale back dangers that mounting debt piles will destabilise the financial system, the official China Securities Journal mentioned on Monday.
The People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) lately issued a discover to monetary establishments, urging them to strengthen monetary assist for such acquisitions, the newspaper reported.
Over the previous months, Chinese regulators have marginally eased funding curbs on the real estate sector, to stop debt dangers spreading from struggling developers together with China Evergrande Group and Kaisa Property Holdings.
Regulators are urging Chinese banks to actively present lending to fund acquisitions of initiatives owned by cash-strapped developers, and keep away from chopping, or withdrawing, loans to these firms, China Securities Journal reported.
But solely the acquisition of real estate initiatives, slightly than buying stakes within the struggling developers, can be inspired, the newspaper mentioned, citing unidentified sources.
Meanwhile, developers with out monetary issues are additionally being inspired to difficulty bonds to fund such acquisitions, and PBOC is urging monetary establishments to put money into such debt devices, in accordance to the newspaper.
Developers together with China Merchants Shekou Industrial Zone Holdings Co (001979.SZ) plan to difficulty debt devices through the interbank market within the close to time period to fund mergers and acquisitions, native media has reported.
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