China to issue 1 trillion yuan loans to finance stalled property projects – report

 

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China will help property developers by issuing 1 trillion yuan ($148.2 billion) in loans for stalled developments, the Financial Times reported on Thursday.

The People’s Bank of China (PBOC) will initially issue about 200 billion yuan of low-interest loans, charging about 1.75% a year, to state commercial banks, the FT said, citing people involved in the discussions.

The plan, recently approved by China’s State Council, will permit banks to use the PBOC loans along with their own funds to refinance stalled real estate projects, the report added.

The government hopes the banks will be able to leverage its initial fund by up to five times to raise a total of about 1 trillion yuan and partially fill the funding gap needed to complete unfinished projects, the report said.

It’s earlier reported that China planned to launch a real estate fund to help property developers resolve a crippling debt crisis, aiming for a warchest of up to 300 billion yuan ($44.5 billion).