China intends to offer a minimum of 1 trillion yuan ($137.22 billion) in affordable financing for the nation's urban village renovation and affordable housing initiatives, as per sources familiar with the matter cited by Bloomberg News on Tuesday.
(Photo: Bloomberg)
Funds will be infused gradually by the People's Bank of China through policy banks, to benefit households for their home purchases, according to individuals familiar with the matter who preferred not to be identified discussing private affairs. Officials are exploring various options, including the Pledged Supplemental Lending and special loans. The government may initiate the first step as early as this month, the sources added.
As part of a new initiative led by Vice Premier He Lifeng, the plan represents a significant escalation in the government's efforts to stabilize the extensive property downturn, which has had a substantial impact on economic growth and consumer confidence. Growing worries in the market revolves around the financial stability of the country's largest developers, with several of them facing defaults.
As of October, China's outstanding PSL (Pledged Supplemental Lending) amounted to 2.9 trillion yuan. A net injection of 1 trillion yuan through this lending facility would surpass the previous record set in 2019. The exact amount of the new funding is subject to change, according to sources.
State-run developers like China Resources Land Ltd. benefited the most from the previous expansion of affordable housing projects.
(With Input from Agencies)
© Copyright 2023. All Rights Reserved Powered by Vygr Media.
