China plans to rescue property firms in strongest sign yet that policymakers are easing a years-long clampdown on sector
- People’s Bank of China and China Banking and Insurance Regulatory Commission have jointly issued a notice to financial institutions laying out plans to ensure the ‘stable and healthy development’ of the sector, sources say
- Authorities have sought to defuse the property crisis with a raft of measures in the past few months
China has unveiled its most sweeping rescue package to bail out a real estate market mired in a record slowdown and deepening liquidity crunch, according to people familiar with the matter.
As part of the rescue plan, developers’ outstanding bank loans and trust borrowings due within the next six months can be extended for a year, while repayment on their bonds can also be extended or swapped through negotiations, the people added.
The move is the strongest sign yet that Chinese policymakers are easing a years-long clampdown on the property sector, one of the biggest drags on the world’s second-largest economy along with the nation’s dogged Zero-Covid policies. Authorities also issued a sweeping set of measures to recalibrate their pandemic response on Friday, publicly outlining a 20-point playbook for officials aimed at reducing the economic and social impact of containing the coronavirus.
Taken together, the policy pivots by President Xi Jinping’s government address two of the biggest headwinds to China’s growth outlook and are likely to add fuel to a market rally that sent a gauge of Chinese shares in Hong Kong up 17 per cent in the past two weeks.