Shanghai (China), Nov 25 (EFE).- The new credit lines that the major Chinese state-owned banks will offer to various companies in the country’s battered real estate sector now amount to around 1.28 trillion yuan (178,000 million dollars, 170,950 million euros), the official business newspaper Securities Times reported today.
Banks have released several announcements since Wednesday, just days after the government unveiled a 16-measure plan to shore up the battered housing sector and the central bank and banking regulator held a symposium with the country’s major banks in which funding schemes for promoters were addressed.
Among the most recent is that of the Industrial and Commercial Bank of China (ICBC), the largest bank in the country, which will open credit lines for a total amount of 655,000 million yuan (91,450 million dollars, 87,830 million euros) 12 developers including the country’s two largest by sales volume, Country Garden and Vanke.
These two companies will also receive loans from other entities, as well as other major real estate companies such as China Overseas, China Resources Land, Longfor Group, Gemdale, Poly Real Estate or Midea Real Estate.
“The companies covered are mostly quality companies whose business is relatively conservative. Some other companies will also receive more support in the rest of the month and in December,” said Yan, an analyst at real estate consultancy E-House China. from the Hong Kong newspaper South China Morning Post.
At present, of the six large state-owned banks in the Asian country, only two – Agricultural Bank of China and China Construction Bank – have not specified the amounts they will make available to real estate companies.
The real estate sector is in dire financial straits after Beijing announced restrictions in 2020 to try to prevent a surge in debt by developers, which had been experiencing strong growth for years through aggressive leverage and flat selling policies.
The best-known international case is that of Evergrande, which in the middle of last year accumulated liabilities of over 300,000 million dollars and which was seized by the authorities after failing to fulfill its obligations.
The lack of liquidity in the sector has forced numerous developments across the country to have to stop work, resulting in a “mortgage boycott” this summer that has extended to more than 100 cities, with buyers of unfinished apartments informed the banks that they would not continue to pay their loans.
In recent months, Beijing has announced other measures to try to alleviate the real estate crisis, such as the opening of special credit lines or the request to the country’s large state banks to provide additional loans for a value of one trillion yuan (about 140,107 million dollars or 134,246 million euros) to the sector in the last months of the year.
Indeed, coinciding with the disclosure of the new credit lines, the banking regulator announced yesterday that Chinese banks lent the country’s developers an estimated 2.64 trillion yuan ($368.643 million, €354.034 million) between January and October. EFE extension
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