China: the prospect of a public support fund reassures the real estate sector
The headquarters of Chinese real estate giant Evergrande in Shenzhen (illustrative image).
AP - Ng Han Guan
Text by: RFI Follow
1 min
In China, the state could financially help the real estate sector, which accounts for a quarter of Chinese GDP.
Shares of major Chinese real estate groups took off after the Chinese premier's announcement.
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Investors reacted very favorably to Li Keqiang's remarks.
During a ministerial meeting on Friday evening, the Chinese premier called for measures “
that promote the development of a healthy and solid real estate market
”, in particular mentioning a public fund to bail out developers in China, without giving details. on the proposed arrangements.
On the Hong Kong Stock Exchange, shares of real estate groups CIFI Holdings (Group) and Guangzhou R&F Properties rose 12% and 6% respectively.
In Shanghai, Cinda Real Estate, Poly Developers and Gemdale group gained between 3 and 6%.
It is true that
the major real estate groups have been under strong pressure
since Beijing launched measures in 2021 aimed at controlling their level of indebtedness.
The pandemic and a wave of defaults, which have hit the sector, have sharply reduced demand.
As a result, some groups are struggling to continue their projects.
The crisis recently took a new turn with a monthly payment strike.
Owners refusing to repay their loans until the work progresses.
The Prime Minister's announcement therefore brings a glimmer of hope to players in the sector as, for its part, the giant Evergrande tries to conclude a restructuring agreement for its debt estimated at 300 billion dollars.
► To read also: China: the real estate giant Evergrande, over-indebted, changes direction to turn the page
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