China's central bank grants 250 billion yuan to support private enterprises' bond financing, including property developers
Published: Nov 09, 2022 12:57 PM Updated: Nov 09, 2022 12:54 PM
Shenzhen real estate Photo:VCG

Shenzhen real estate Photo:VCG

Supported by the People's Bank of China (PBC), China's central bank, the utility of the instruments for private enterprises' bond financing, also known as "the second arrow," will be expanded to boost the financing of the country's private enterprises, including property developers, the National Association of Financial Market Institutional Investors (NAFMII) announced on Wednesday.

The PBC-backed second arrow will be used to support private enterprises' issuance of bonds under the operation by professional institutes and follow the principles of market, which is estimated to support 250 billion yuan ($34.52 billion) worth of private enterprises' bond financing and may be enlarged depending on the circumstance.

The policy mix of "three arrows" was established by the PBC in 2018 to boost support for private enterprises and small and micro business from three aspects of credit, bond financing and stock equity.

NAFMII said the association had conducted series credit enhancement works along with China Bond Insurance Co and multiple private real estate developers recently and made remarkable progress, vowing to further increase the market confidence as well as stabilize the financing market for the private sector.

The recovery of Chinese real estate sector has improved over recent months with the China Index Academy's data showed that the non-bank financing scale of China's real estate developers in October reached 55.68 billion yuan, up 16.4 percent year-on-year, the first positive increase in 2022, Security Times reported.

The accumulative non-bank financing scale of the industry in first 10 months amounted 753.55 billion yuan, falling by 51.4 percent year-on-year. However, due to serial boost policies, the comprehensive average financing interest rate in real estate industry recorded at 3.48 percent in October, down 2.39 percentage points year-on-year, largely cutting the cost for financing.

Global Times