China’s financial regulator pledges steps to shore up property market

National Administration of Financial Regulation says implementing a plan to support real estate projects is a priority for this year

Meanwhile, central bank announces cuts to certain lending rates and the reserve requirement ratio as property sector’s woes continue to drag on economy

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A woman walks beside a bank in Beijing. Photo: EPA-EFE

Published: 10:30pm, 25 Jan 2024Updated: 9:39am, 26 Jan 2024

China’s financial regulator turned its sights on the property market on Thursday, vowing measures such as better support for cash-strapped developers and mortgage policies designed to offer more help for households.

Xiao Yuanqi, deputy head of the National Administration of Financial Regulation, said the priority for this year was to “accelerate the implementation of the urban real estate financing coordination mechanism” – a measure announced earlier this month to ask local governments to better coordinate with financial institutions to provide financial support for real estate projects.

“[We will] ask banks to take action as soon as possible... [and] make good use of the policy toolbox and accurately support the reasonable financing needs of real estate projects,” he added.

Xiao said the regulator will soon convene a meeting, asking local governments to work with housing and construction departments to implement city-specific measures.

Meanwhile, the People’s Bank of China announced it would inject 1 trillion yuan (US$141 billion) of liquidity by slashing the reserve requirement ratio by 50 basis points and lowering the relending rate for some banks loans by 25 basis points.

The central bank also decided to set up a new department to oversee credit support, a sign it will provide tailor-made support to the country’s weak links.

Analysts have long urged the authorities to act to fend off the so-called 4Ds of an economic apocalypse – debt, deflation, de-risking and demographics – but doubts, mainly from overseas, remains about how the top leadership will overcome the barriers to solving these problems or manage wider challenges such as global market turmoil and wider geopolitical tensions.