From Breakingviews - China’s property easing is minor capitulation
Customers visit a real estate exhibition displaying models of apartments in Hefei, Anhui province, May 1, 2014. Chinese home prices rose at a slower pace in April, two private surveys showed on Thursday, adding to signs of cooling in the country's property market. The Chinese characters on the models read,"Sold out".
This will help developers evade defaults and hopefully complete swathes of unfinished projects which were pre-sold to buyers. It will also give their banks, which might have otherwise had to recognise a spike in non-performing loans, a breather. But the scale of the problem remains vast. The new credit is only half the amount of onshore and offshore debt estimated coming due in 2023. Anby Dragonomics researcher Zhang Xiaoxi suggests some 4.7 trillion yuan of outstanding debt, or 2.
Beijing still needs to pad the impact of a property downturn, which is difficult when the retail sector remains below pre-pandemic levels, youth unemployment is at record highs, and exports are fading. But if property must correct in the name of rebalancing, that makes boosting the rest of the economy more urgent.Chinese regulators told financial institutions to extend more support to property developers to shore up the country's struggling real estate sector, Reuters reported on Nov.
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