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Chinese city to help shantytown projects via policy bank loans - sources

Chinese city to help shantytown projects via policy bank loans - sources

Reuters · 07/28/2022 03:37
Chinese city to help shantytown projects via policy bank loans - sources

By Shuyan Wang and Clare Jim

- China's Zhengzhou city will help to ensure developers have enough funds to complete homes under shantytown redevelopment projects through support from the China Development Bank, two sources with knowledge of the situation said.

Property firm Zhengzhou Real Estate, which is backed by the government of Henan province, will borrow on behalf of developers and will set up project companies for shantytown redevelopment projects that financing, according to the sources and an official document seen by Reuters.

The Zhengzhou city government and China Development Bank, one of the country's top policy lenders, did immediately respond to a request for comment.

Zhengzhou, which is in Henan province, has been at the centre of a mortgage boycott by homebuyers that erupted across the country this month after many home building projects were delayed or left unfinished because of developers' financial problems, COVID-19 and serious floods.

Media reported on Wednesday that the Zhengzhou city government met several bigger developers and proposed ways to resolve the problem of unfinished homes such as by loans to developers, mergers and acquisitions, liquidation and restructuring, as well as by turning them into subsidised rental housing.

Zhengzhou Real Estate set up one of China's first bailout funds last week with state-owned Henan Asset Management.

The real estate company plans to use 20 billion yuan to acquire 50,000 units and rent them, according to a issued by Zhengzhou authorities this month.

Trying to revive the debt-stricken sector and relieve pressure on the economy, authorities will help property developers by issuing 1 trillion yuan ($148.2 billion) in loans for stalled developments, the Financial Times said on Thursday.

(Reporting by Shuyan Wang in Beijing and Clare Jim in Hong Kong; Editing by Robert Birsel)