China’s central bank to speed up special loans to ensure delivery of homes
Published: Sep 29, 2022 07:48 PM
PBC Photo:Xinhua

PBC Photo:Xinhua

The People's Bank of China (PBC), the central bank, said on Thursday that it will speed up the implementation of special loans to ensure delivery of residential buildings and increase the application scope as needed.

Local governments should adopt city-specific policies to support genuine housing needs, promote the accelerated use of special loans to guarantee property delivery and increase the strength as needed, the PBC said at a routine meeting held for the third quarter.

China's housing ministry, finance ministry and the PBC said in a statement in August that China will offer special loans through policy banks to ensure property projects are delivered to buyers, and that support will be extended only to projects facing difficulties with delivery, the Xinhua News Agency reported.

The ministries said some real estate companies have long relied on high debt, high leverage and high turnover. Given the impact of the epidemic and the increasing downward pressure on the market, sales have been uneven, which led some sold commercial residential projects to be suspended or delivered late due to difficulties in capital turnover.

Meanwhile, a number of Chinese real estate enterprises, including Evergrande, Sunac and Overseas Chinese Town Holdings Co, have been urged to resume housing construction by local governments.

On September 7, Zhengzhou in Central China's Henan Province required all unfinished housing projects to resume construction before October 6, 2022.

The PBC also said that it would make good use of policy-based development financial tools and focus on supporting infrastructure construction.

Meng Wei, a spokesperson for China's National Development and Reform Commission, said on September 19 that it would adopt forceful measures to speed up project construction following the first round of policy-based development financial tools worth 300 billion yuan ($42.81 billion) as soon as possible.

China has moved to deploy 300 billion yuan in financial instruments during a State Council executive meeting in late June. The funds were designed to replenish the capital for major projects or to provide financing for projects funded by special-purpose bonds. In August, the Chinese government doubled the quota of these instruments.

On Thursday, the PBC said that China will further deepen market-based reform of the yuan and keep the RMB exchange rate within a stable, reasonable and balanced range.

Chinese officials stressed that the yuan's exchange rate has maintained "basic stability" at a reasonable and balanced level this year, while warning against betting on one-way appreciation or depreciation of the currency, according to an official statement released on Wednesday.