The Magazine for Asian Investors
The Financial Times reported Thursday (July 28) that China will help real estate developers by issuing 1 trillion yuan ($148.2 billion) in loans for stagnant real estate projects while trying to revive bad loans in the sector.
The Chinese real estate sector, a cornerstone of the world’s second-largest economy, is going from one crisis to the next and was a key growth driver last year.
The People’s Bank of China (PBOC) will provide soft loans of about 200 billion yuan at an interest rate of about 1.75% per year to state-owned commercial banks.
The plan, recently approved by China’s State Council, will allow banks to use PBOC loans along with their own funds to refinance stagnant real estate projects.
China also plans to set up a real estate fund to help developers cope with the debt crisis. A campaign fund worth 300 billion yuan ($44.5 billion) is to be built up.