BEIJING — China signaled support for property developers and resolving local government debt problems in a high-level financial meeting that ended Tuesday, according to a state media readout.
Such twice-a-decade financial work conferences tend to set long-term policy directions, which then pave the way for more detailed moves.
“Policymakers emphasized that private and state-owned property developers would be treated equally and their reasonable funding demands would be satisfied,” Goldman Sachs’ Maggie Wei and a team said in a report published Wednesday.
“Policymakers would establish long-term effective mechanism to resolve local government debt and ‘optimize the structure of central and local government debt,'” the report said.
Beijing began cracking down on property developers’ high reliance on debt for growth in 2020. The massive real estate sector has slumped amid developer defaults and falling home sales.
In recent months Chinese authorities have eased restrictions on home purchases and sought to support developers in finishing construction of apartments, which are typically sold ahead of completion.
But Beijing has stopped short of an outright bailout for a sector that’s widely expected to shrink from its roughly one-quarter share of China’s economy.
“Regarding property, they vowed to meet the reasonable financing needs from developers. It’s noteworthy that the conference didn’t mention the mantra ‘housing is for living, not for speculation,'” Larry Hu, chief China economist at Macquarie, and a team said in a note published Tuesday.
The Hang Seng Property Development and Management Index was up mildly in Wednesday morning trade.
The property market is closely intertwined with local government finances, which have also struggled after paying for many Covid-related measures.
