The banking regulator provides prudential real estate financing


An employee counts cash at a bank in Nantong, Jiangsu Province. [Photo/Sipa]

By emphasizing “the prudential management system of real estate finance”, China will adhere to the principle “housing is for living, not for speculation” and will insist not to use real estate as a means of short term to stimulate the economy, the China Banking and Insurance Regulatory Commission said on Thursday.

“The CBIRC will continuously implement the long-term mechanism to maintain the good development of the real estate market, guide banking and insurance institutions to understand and accurately implement the prudential management system of real estate finance, and maintain the continuity and stability of real estate financial regulatory policies, ”said Liu Zhongrui, deputy director of the statistics, IT and risk monitoring department of China’s main banking and insurance regulator.

Based on the market-oriented principle and the rule of law, the regulator will cooperate with relevant government departments and local governments to jointly maintain the stable and healthy development of the real estate market as well as to protect the legal rights and interests of buyers. from home, Liu said. during a press conference organized by the Information Office of the Council of State.

Responding to the concerns of foreign investors about the debt-laden real estate developer China Evergrande Group, he stressed that the crisis is an individual case in the Chinese real estate sector. The woes of Evergrande signify the problem of a sole proprietorship, he said.

“Based on our judgment, Evergrande’s debt problem will not have a huge impact on the Chinese real estate industry or greatly affect the reputation of Chinese companies in general. The reputation of Chinese enterprises lies in the stable and improved economy of the country, which has laid the foundation for the credibility of Chinese enterprises and the constant long-term development of real estate companies, ”he said.

The overall risk associated with Evergrande is controllable, and relevant government departments and local governments are moving forward with eliminating the risk in accordance with laws and regulations, Liu said.

“Financial liabilities represented less than a third of Evergrande’s total liabilities. Generally speaking, banks’ exposure to the group is not huge. In addition, its debt is dispersed among different banks, so the exposure of banks to the group is not huge. ‘an individual bank in Evergrande isn’t huge either, “Liu says.

Wang Zhaodi, chief reviewer and spokesperson for CBIRC, said, “We have firmly implemented China’s real estate regulation policies, which uphold the principle that housing is for living, not for speculation.

The regulator has steadily improved the country’s credit structure during the first nine months of this year.

At the end of September, mortgage loan growth slowed to 8.6% year-on-year, almost 3 percentage points lower than the growth in total loans.

At the same time, the country saw its loans to the manufacturing sector increase by 12.6% year-on-year; its loans to small and micro-businesses, with total lines of credit of 10 million yuan ($ 1.56 million) per borrower, jumped 25.2 percent, Wang said.

New yuan loans reached 16.7 trillion yuan in the first nine months, up 462.4 billion yuan from the same period last year, he said.

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