China vows to support property sector, tackle local debt

Unfinished apartment buildings stand at a residential complex developed by Jiadengbao Real Estate in Guilin, Guangxi Zhuang Autonomous Region, China Sept 17, 2022. REUTERS/Eduardo Baptista

BEIJING  – China’s central bank and financial regulators pledged on Friday to ensure financing support for the property sector and to work together to resolve local government debt risks.

Chinese leaders are trying to revive the economy and fend off potential financial risks from a property slump and 92 trillion yuan ($12.77 trillion) in local government debt.

Financial institutions will meet reasonable financing needs of property firms and refrain from withdrawing or cutting off loans to them, the securities regulator said on Friday, after a meeting held by the central bank and financial regulators.

Recent efforts to stabilize financing for the real estate sector via bank credit, bonds, and equity are gaining traction, the China Securities Regulatory Commission said.

China will promote stable credit expansion to support its economic growth, and financial institutions should work with local governments to resolve debt risks, by extending, swapping or rolling over debt, the regulator added.

($1 = 7.2050 Chinese yuan renminbi)