China’s finance firms must back developers: An undeniable duty

January 26, 2024
1 min read

TLDR: China’s financial institutions have been urged to provide strong support to the country’s struggling real estate sector, according to a senior Chinese financial regulatory official. The official stated that financial institutions should not “blindly withdraw” financing for projects facing difficulties, but instead offer greater support through extending existing loans, adjusting repayment arrangements, and adding new loans. This comes after the Chinese central bank recently cut mandatory cash reserves for banks and released a policy mandate aimed at easing the cash crunch for Chinese developers. The official emphasized the importance of the real estate industry to the national economy and its impact on people’s lives. However, he also noted that the recent relaxation of funding guidelines is designed to be targeted and focused on controllable risks and commercial sustainability. The meeting also highlighted the government’s efforts to speed up the implementation of recent policy announcements.

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