Home Stamp collecting China Urges Banks To Avoid Real Estate Speculation To Limit Evergrande Risk, Real Estate News, ET RealEstate

China Urges Banks To Avoid Real Estate Speculation To Limit Evergrande Risk, Real Estate News, ET RealEstate

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BEIJING: China has urged banks to stabilize the housing market and avoid speculation amid growing fears that the Evergrande debt crisis will spill over to the real estate sector.

Struggling with more than $ 300 billion in liabilities that it is struggling to repay, the potential collapse of the Chinese real estate developer poses systemic risks to the national and global economy.

In a meeting on Wednesday, the People’s Bank of China (PBOC) said the country’s financial sector must meet targets of “stabilizing land and house prices” and “insist on not using real estate as a stimulus. economic in the short term, “according to an online statement.

The central bank also stressed that “houses are for living, not for speculating.”

Reading the meeting with the Banking and Insurance Regulatory Commission does not specifically mention Shenzhen-based Evergrande.

But it sends a clear signal that authorities are concerned about the repercussions of the Evergrande crisis on China’s real estate sector, which has seen months of tightening regulations aimed at curbing speculation.

Beijing has so far been reluctant to bail out the conglomerate, but Chinese media have reported that the Shenzhen government has opened an investigation into Evergrande’s investment arm.

The Shenzhen financial regulator said in a letter to investors on Monday that a “full investigation” was underway after gathering information on Evergrande Wealth, Chinese media reported this week.

– Newsgroups blocked – Newsgroups containing hundreds of disgruntled Evergrande investors on the WeChat messaging service have been deleted or blocked since Monday, two investors told AFP, with members unable to send or receive messages. messages.

These social media groups have been used to stage protests in recent weeks as investors demand repayment after the properties and high returns on wealth products promised by Evergrande never materialized.

An error message in several newsgroups shown to AFP said the group was “suspected of having violated applicable laws and regulations.”

“Many members of the group were summoned by local police (in Shenzhen), some were even invited to sign agreements (…) not to petition Beijing,” said an investor who wished to remain anonymous .

“We believe that we are law-abiding citizens who have not broken the law. We are just reasonably asking for our money back.”

Evergrande has started the process of divesting its assets, including the sale of a $ 1.5 billion stake in a regional Chinese bank to a state-owned company.

The developer said in a statement Thursday that it had made a 10% repayment of the investment proceeds due in September and that the funds had been “issued to the accounts of the corresponding investors.”

A $ 47.5 million interest payment on a U.S. dollar bond was due Wednesday – less than a week after the real estate giant was due to pay another offshore bond.

He made a deal to pay interest on a yuan-denominated note last week.