Page 176 - 2023 White Paper on the Business Environment in China
P. 176
3 White Paper on the Business Environment in China
real estate troubles have only gotten worse. Some are fulfilled by all stakeholders, the CBIRC will
homebuyers refused to pay their mortgages due to guide banks to take an active part in finding real
construction delays, while property sales plunged. estate funding solutions, grant credit to qualified
Once-healthy developers are also struggling to home developers, and take various measures
repay debt. to promote actions ensuring timely deliveries of
presold homes. The official said that in the next
The growth rate of China's real estate sales stage, the CBIRC will effectively satisfy reasonable
area in 2022 likely dropped to 1.7% from 1.9%, financing needs of real estate companies, give
while growth in development investment will substantial support to the construction of
drop to 0.8%. However, analysts predicted that rental homes, support mergers, acquisitions
the sale price of real estate would maintain an and the restructuring of housing projects, and
annual increase of 2.8% under the influence of better meet the rigid and upgraded demand for
stabilization policies in the real estate sector, and housing with a focus on new urbanites and young
national real estate transactions would gradually people living in cities and towns. The regulator
recover in 2022. Multiple Chinese real estate defined new urbanites as people who live in a
developers encountered financial difficulties city permanently but have not yet obtained a
and low levels of liquidity in the latter half of local hukou, or those who obtained a local hukou
2021, which largely affected market dynamics. within the past three years. Yao Hong, vice-
Financial issues among developers eased on president of the Postal Savings Bank of China,
the back of supportive policies, and the capital said the large state-owned commercial lender
demands for homebuyers and developers have will grasp the opportunities brought by China's
been rectified. The problems within the real strategies to promote rural revitalization, a new
estate sector in 2021 were largely linked to lack type of urbanization and regional development,
of confidence in the market. In 2022, supporting as well as step up support for new urbanites'
reasonable housing demands was expected to be borrowing needs for home purchases. PSBC will
the guiding principle of policymakers throughout continuously maintain close communication
the year, and the national transaction value with relevant government departments and real
of residential property is forecast to reach 22 estate developers to promote the resumption of
trillion RMB (US$3.27 trillion) (Global Times). work and production of stalled housing projects.
In addition, the bank will continue to allow
In the first half of 2022, the central government customers with COVID-19-related repayment
kept sending positive signals that China is fine- difficulties to defer repayments on mortgage loan
tuning housing regulatory policies to stabilize principal and interest. The overall risk of PSBC's
market expectations and mitigate default risks mortgage loans remains controllable. Ping An
faced by Chinese property developers. It required Bank, a national joint-stock commercial lender
local governments to give a vigorous boost to based in Shenzhen, Guangdong province, told
the efforts to ensure timely deliveries of presold China Daily in August 2022 that PSBC would focus
homes and safeguard people's livelihoods. on supporting the development and operations
Thanks to the impact of a positive housing policy of government-subsidized housing and rental
environment, the real estate finance situation housing as well as M&As of real estate projects
improved marginally in China in the first half. that are in line with China's housing policy
The average mortgage interest rate nationwide orientation. The bank will actively participate
for first-time homebuyers kept falling during the in the underwriting of and investment in bonds
period. The figure was around 4.4% at the end issued to finance real estate company M&A
of the first half, 5 basis points lower than the deals. China Merchants Bank, another national
then over-five-year loan prime rate, a market- joint-stock commercial lender, also said it would
based benchmark lending rate. An official of strengthen the forward-looking forecast of the
the China Banking and Insurance Regulatory real estate risk situation and continue to adjust
Commission said in August 2022 that under the structure of real estate customers, regions,
the orderly management of local governments businesses and products while focusing on key
who are tasked with seeing that responsibilities cities and strategic customers (Jiang).
176
real estate troubles have only gotten worse. Some are fulfilled by all stakeholders, the CBIRC will
homebuyers refused to pay their mortgages due to guide banks to take an active part in finding real
construction delays, while property sales plunged. estate funding solutions, grant credit to qualified
Once-healthy developers are also struggling to home developers, and take various measures
repay debt. to promote actions ensuring timely deliveries of
presold homes. The official said that in the next
The growth rate of China's real estate sales stage, the CBIRC will effectively satisfy reasonable
area in 2022 likely dropped to 1.7% from 1.9%, financing needs of real estate companies, give
while growth in development investment will substantial support to the construction of
drop to 0.8%. However, analysts predicted that rental homes, support mergers, acquisitions
the sale price of real estate would maintain an and the restructuring of housing projects, and
annual increase of 2.8% under the influence of better meet the rigid and upgraded demand for
stabilization policies in the real estate sector, and housing with a focus on new urbanites and young
national real estate transactions would gradually people living in cities and towns. The regulator
recover in 2022. Multiple Chinese real estate defined new urbanites as people who live in a
developers encountered financial difficulties city permanently but have not yet obtained a
and low levels of liquidity in the latter half of local hukou, or those who obtained a local hukou
2021, which largely affected market dynamics. within the past three years. Yao Hong, vice-
Financial issues among developers eased on president of the Postal Savings Bank of China,
the back of supportive policies, and the capital said the large state-owned commercial lender
demands for homebuyers and developers have will grasp the opportunities brought by China's
been rectified. The problems within the real strategies to promote rural revitalization, a new
estate sector in 2021 were largely linked to lack type of urbanization and regional development,
of confidence in the market. In 2022, supporting as well as step up support for new urbanites'
reasonable housing demands was expected to be borrowing needs for home purchases. PSBC will
the guiding principle of policymakers throughout continuously maintain close communication
the year, and the national transaction value with relevant government departments and real
of residential property is forecast to reach 22 estate developers to promote the resumption of
trillion RMB (US$3.27 trillion) (Global Times). work and production of stalled housing projects.
In addition, the bank will continue to allow
In the first half of 2022, the central government customers with COVID-19-related repayment
kept sending positive signals that China is fine- difficulties to defer repayments on mortgage loan
tuning housing regulatory policies to stabilize principal and interest. The overall risk of PSBC's
market expectations and mitigate default risks mortgage loans remains controllable. Ping An
faced by Chinese property developers. It required Bank, a national joint-stock commercial lender
local governments to give a vigorous boost to based in Shenzhen, Guangdong province, told
the efforts to ensure timely deliveries of presold China Daily in August 2022 that PSBC would focus
homes and safeguard people's livelihoods. on supporting the development and operations
Thanks to the impact of a positive housing policy of government-subsidized housing and rental
environment, the real estate finance situation housing as well as M&As of real estate projects
improved marginally in China in the first half. that are in line with China's housing policy
The average mortgage interest rate nationwide orientation. The bank will actively participate
for first-time homebuyers kept falling during the in the underwriting of and investment in bonds
period. The figure was around 4.4% at the end issued to finance real estate company M&A
of the first half, 5 basis points lower than the deals. China Merchants Bank, another national
then over-five-year loan prime rate, a market- joint-stock commercial lender, also said it would
based benchmark lending rate. An official of strengthen the forward-looking forecast of the
the China Banking and Insurance Regulatory real estate risk situation and continue to adjust
Commission said in August 2022 that under the structure of real estate customers, regions,
the orderly management of local governments businesses and products while focusing on key
who are tasked with seeing that responsibilities cities and strategic customers (Jiang).
176
