China’s banks approve $1.7 billion in loans under ‘whitelist’ project for housing development

China’s banks approve $1.7 billion in loans under ‘whitelist’ project for housing development

China’s five national banks have approved over 8,200 housing initiatives through a “whitelist” strategy designed to inject liquidity into the beleaguered property market, according to state-endorsed The Paper. The “project whitelist” scheme involves municipal authorities suggesting residential developments for bank financing, facilitating coordination between the government and financial institutions to address the funding needs of these projects. This approach forms a critical component of Beijing’s strategy to mitigate the real estate sector’s debt crisis and elevate confidence in an industry vital to approximately a quarter of the nation’s GDP

A passenger rides a train travelling past residential buildings during the Spring Festival travel rush on Lunar New Year's Eve, in Zhuozhou, Hebei province, China February 9, 2024

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The Postal Savings Bank of China, another state bank, has sanctioned some loans, addressing financing requirements worth 5.7 billion yuan ($792.5 million) from “whitelist” submissions, though it hasn’t disclosed the specific number of projects covered. Out of the initial five state banks, the Industrial and Commercial Bank of China, Agricultural Bank of China, and China Construction Bank had each received applications for over 2,000 projects. As of February 13, the Bank of Communications had taken in 1,442 projects, whereas the Bank of China had greenlit 75 projects involving nearly 40 billion yuan after reviewing over 110 applications by Monday. The Agricultural Bank of China had allocated close to 5 billion yuan in loans across more than ten projects, predominantly non-state-owned developer ventures.

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Cheng from CGS International estimates that the 8,000 projects collectively require financing of about 3.2 trillion yuan, with a third potentially constituting new loans. Following these developments, the Hang Seng Mainland Properties Index saw an uptick exceeding 4% on Friday. Shares of developers like Shimao Group, KWG Group, and Kaisa Group, all of which had previously defaulted, surged over 10%

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Source : REUTERS

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