Chinese authorities have unveiled sweeping measures to rescue its struggling property sector, as regulators seek to offset years of harsh COVID-19 pandemic curbs and a real-estate crackdown that have stalled the world’s No. 2 economy.
China’s banking regulator and central bank on Friday issued a 16-point set of internal directives to promote the “stable and healthy development” of the industry, which were reported by Chinese state media yesterday.
The measures include credit support for debt-laden housing developers, financial support to ensure completion and handover of projects to homeowners, and assistance for deferred-payment loans for homebuyers.
Photo: Bloomberg
That came on the same day the Chinese National Health Commission issued 20 rules for “optimizing” Beijing’s “zero COVID” policy, where certain restrictions were relaxed to limit its social and economic impact.
“We view this as the most crucial pivot since Beijing significantly tightened financing of the property sector,” Nomura Holdings Inc chief China economist Ting Lu (陸挺) wrote in a note. “We believe these measures demonstrate that Beijing is willing to reverse most of its financial tightening measures.”
Hong Kong stocks surged more than 3 percent yesterday, extending Friday’s rally of more than 7 percent the measures were unveiled.
Beijing imposed widespread lending curbs on property developers in 2020, which exacerbated their liquidity issues and caused several of the largest to default on bond payments.
The knock-on effects on the massive real estate sector were severe, with cash-strapped developer Evergrande Group (恆大集團) — China’s largest — and others failing to complete projects, sparking mortgage boycotts and protests from homebuyers.
The measures emphasized “guaranteeing the handover of buildings,” and ordered development banks to provide “special loans” for the purpose, according to a document circulating online.
It orders financial institutions to treat state-owned and private real-estate enterprises equally, as well as “actively cooperating with distressed real estate enterprises in risk management.”
The measures also include “extending the transition period arrangements... of real-estate loans” for distressed developers, and support for “high-quality real-estate enterprises to issue bond financing.”
“The plan includes financial stability measures that aim to prevent massive defaults and hence provide a ‘soft landing,’” Australia and New Zealand Banking Group Ltd analysts wrote in a note.
However, they also said these changes — alongside limited loosening of “zero COVID” measures — would not cause an immediate recovery for the ailing sector.
“While not many are expecting a financial crisis caused by the current property downturn, the mainstream view is that the property sector would stay weaker for longer. Therefore, the worst is far from over for developers,” Macquarie Securities Inc economist Larry Hu (胡偉俊) wrote in a note.
Prices of new homes have been falling for more than a year, while demand is struggling to pick up owing to ongoing strict pandemic controls that have dampened consumer confidence.
CHANGING JAPAN: Nvidia-powered AI services over cellular networks ‘will result in an artificial intelligence grid that runs across Japan,’ Nvidia’s Jensen Huang said Softbank Group Corp would be the first to build a supercomputer with chips using Nvidia Corp’s new Blackwell design, a demonstration of the Japanese company’s ambitions to catch up on artificial intelligence (AI). The group’s telecom unit, Softbank Corp, plans to build Japan’s most powerful AI supercomputer to support local services, it said. That computer would be based on Nvidia’s DGX B200 product, which combines computer processors with so-called AI accelerator chips. A follow-up effort will feature Grace Blackwell, a more advanced version, the company said. The announcement indicates that Softbank Group, which until early 2019 owned 4.9 percent of Nvidia, has secured a
TECH SECURITY: The deal assures that ‘some of the most sought-after technology on the planet’ returns to the US, US Secretary of Commerce Gina Raimondo said The administration of US President Joe Biden finalized its CHIPS Act incentive awards for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), marking a major milestone for a program meant to bring semiconductor production back to US soil. TSMC would get US$6.6 billion in grants as part of the contract, the US Department of Commerce said in a statement yesterday. Though the amount was disclosed earlier this year as part of a preliminary agreement, the deal is now legally binding — making it the first major CHIPS Act award to reach this stage. The chipmaker, which is also taking up to US$5 billion
TRADE WAR: Tariffs should also apply to any goods that pass through the new Beijing-funded port in Chancay, Peru, an adviser to US president-elect Donald Trump said A veteran adviser to US president-elect Donald Trump is proposing that the 60 percent tariffs that Trump vowed to impose on Chinese goods also apply to goods from any country that pass through a new port that Beijing has built in Peru. The duties should apply to goods from China or countries in South America that pass through the new deep-water port Chancay, a town 60km north of Lima, said Mauricio Claver-Carone, an adviser to the Trump transition team who served as senior director for the western hemisphere on the White House National Security Council in his first administration. “Any product going
CARBON REDUCTION: ‘As a global leader in semiconductor manufacturing, we recognize our mission in environmental protection,’ TSMC executive Y.P. Chyn said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday launched its first zero-waste center in Taichung to repurpose major manufacturing waste, which translates into savings of NT$1.5 billion (US$46 million) in environmental costs a year. The environmental cost savings include a carbon reduction benefit of 40,000 tonnes, equivalent to the carbon offset of over 110 Daan Forest Parks, the chipmaker said. The Taichung Zero Waste Manufacturing Center is part of the chipmaker’s greater efforts to reach its net zero emissions goal in 2050, aligning with the UN’s 12th Sustainable Development Goal. The center could reduce TSMC’s outsourced waste processing
RSS