ធនាគារ​នៅ​ប្រទេស​ចិន​បាន​ផ្តល់​ឥណទាន​ចំនួន ៤៦០ ពាន់​លាន​ដុល្លារ​ដល់​វិស័យ​អចលនទ្រព្យ

 Fresh aid suggests Xi Jinping's focus is on stabilizing economy

SHANGHAI -- Chinese banks are opening more than 3 trillion yuan ($431 billion) in lines of credit for cash-strapped real estate companies, suggesting a temporary emphasis on stabilizing the economy over cutting the industry's debt.

Industrial and Commercial Bank of China, the nation's largest state-owned bank, has announced plans for 655 billion yuan in credit lines for 12 borrowers, including top housing company Country Garden Holdings.

The total announced credit lines from major state-owned and regional banks exceed 3.19 trillion yuan. Maxing them out would lift outstanding real estate development loans by about 25% from the 12.67 trillion yuan tally at the end of September.

Fresh credit provides a lifeline for a heavily indebted property sector whose troubles have weighed on China's economy. Like recent moves to roll back coronavirus-related restrictions, the aid to real estate developers suggests that the leadership under President Xi Jinping is focused on supporting the economy.

China Construction Bank and Agricultural Bank of China, the country's second- and third-largest state-owned banks, have not disclosed specific credit lines, so more aid to the sector may be coming.

Even the announced boost will not immediately solve the debt problems in the real estate industry. Developers have a wide range of liabilities, including accounts payable and homes that have been sold but not handed over. For Country Garden, bank loans constitute only 10% or so of total liabilities.

New aid measures announced by the government on Nov. 23 softened Beijing's tough stance on lending to the property sector. In 2020 and 2021, the government announced a string of restrictions, such as the "three red lines," which include a debt-to-equity ratio limit, and a cap on real estate loans.

Real estate accounts for around 30% of China's gross domestic product, including related industries. Any change in credit to the property sector has a broad economic impact.

By value, housing sales at the top 100 companies fell 25.5% on the year in November and were down by about half compared with November 2020, according to China Real Estate Information. Housing market turmoil has triggered forms of social unrest, such as mortgage strikes by purchasers of homes whose construction has been suspended.

At October's party congress, Guo Shuqing, who doubles as party secretary of the People's Bank of China and chairman of the China Banking and Insurance Regulatory Commission, was dropped from the party's Central Committee. Guo is a leading financial reformer and has spearheaded efforts on deleveraging, including the creation of the three red lines.

Many in the financial industry believe that Yin Yong, deputy party secretary in the city of Beijing, and China Securities Regulatory Commission Chairman Yi Huiman -- two officials recently promoted to the Central Committee -- will take major monetary policy posts in a possible changing of the guard away from reformers.

Support for the real estate industry by state-owned banks will "improve cash flow," according to an analyst at Sinolink Securities. The Hang Seng Mainland Properties Index, which consists of Chinese real estate stocks listed on the Hong Kong exchange, is up more than 90% from a low hit in late October.

Nikkei Asia