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China property
BusinessBanking & Finance

Two Chinese developers get support from state-owned entities, as Beijing responds to mortgage-boycott crisis with bailout

  • Greenland Holdings says it has obtained loans worth 3 billion yuan from two Shanghai government-backed shareholders
  • China Huarong Asset Management agrees to restructure Yango Longking Group’s debt

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Greenland says the loans from Shanghai Land (Group) and Shanghai Chengtou, two shareholders backed by the city government, will ‘ensure its smooth operations’. Photo: Handout
Daniel Ren

Two Chinese developers have secured support from state-owned shareholders or financial institutions to ease their debt burden, in the latest sign that Beijing is stepping in to bail out China’s embattled property sector.

Greenland Holdings, the largest developer in Shanghai, said on Monday that it had obtained loans worth 3 billion yuan (US$443.6 million) from Shanghai Land (Group) and Shanghai Chengtou, two shareholders backed by the city government, to “ensure its smooth operations”.
Greenland said in a statement that the new funds would help it deliver homes that are currently under construction on time.
The developer’s announcement came after China Huarong Asset Management, the state-owned bad-loan disposal giant, signed an agreement with Yango Longking Group on Friday to restructure its debt. Huarong – one of the key asset managers set up in the late 1990s to help dispose of bad loans at mainland China’s four biggest banks – said the agreement was the result of Beijing seeking the stabilisation of the property market. The central government wants to put the real estate industry back on track, it added.

“The central government has set the tone for rescuing some key developers and underpinning the property sector,” said Wang Feng, chairman of Shanghai-based financial services company Ye Lang Capital. “But the outlook is still cloudy, because the relief measures do not appear to be enough to bail out all of the country’s developers and housing projects.”

Across the mainland, hundreds of projects have been stuck because of a credit crunch following the introduction of curbs to cool the property market by Beijing, and the Covid-19 pandemic restrictions put in place in major cities such as Shanghai this year.

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