[Preview of the Weekly] Challenges in Implementing Banks' Support for Real Estate "Three Not Less Than" Policies (AI Translation)
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- China's financial regulators and major banks are increasing support for real estate companies, emphasizing the need to meet the reasonable financing needs of different ownership types of real estate enterprises without discrimination. A recent meeting highlighted 'three not lower than' targets for banks: their real estate loan growth rate should not be lower than the industry average, loans to non-state-owned enterprises should not grow slower than the bank's overall real estate loan growth, and mortgage loan growth for non-state-owned enterprises should match or exceed the bank's overall mortgage growth.
- Despite these statements, there is skepticism about whether these directives will be effectively implemented. There are no specific numerical targets like in previous years, and many details remain unclear. The banking sector has yet to receive formal documentation on how to implement these goals, leading to uncertainty about execution.
- The Chinese real estate market continues to face challenges with declining sales and liquidity issues. Data shows a significant contraction in new construction starts compared to peak years, raising concerns about risk contagion from a potential hard landing in the industry. Financial support measures aim to prevent systemic risks but must navigate complexities such as balancing support across different ownership structures within the sector.
文｜财新周刊 朱亮韬 陈博 刘冉
By Caixin Weekly's Zhu Liangtao, Chen Bo, Liu Ran
时隔一年，似乎重归原点。
A year later, it seems we have come full circle.
年底将至，在10月房地产销售重现萎靡、对房地产风险可能再度蔓延的担忧之下，近期监管层和各家大行对于金融支持房企的表态进一步加码。
As the year-end approaches, amid concerns of a slump in real estate sales in October and the potential spread of risks in the property sector, regulators and major banks have recently stepped up their statements on financial support for real estate enterprises.
2023年11月17日，中国人民银行、国家金融监督管理总局（下称“金监总局”）、证监会联合召开金融机构座谈会，特别在房地产金融方面，强调各金融机构要深入贯彻落实中央金融工作会议部署，坚持“两个毫不动摇”，再次重申要“一视同仁”满足不同所有制房地产企业合理融资需求，对正常经营的房企不“惜贷、抽贷、断贷”；要继续用好“第二支箭”，支持民营房地产企业发债融资，支持房地产企业通过资本市场合理股权融资。
On November 17, 2023, the People's Bank of China, the National Financial Regulatory Administration (referred to as "NFRA"), and the Securities Regulatory Commission jointly convened a symposium for financial institutions. Special emphasis was placed on real estate finance, where it was stressed that all financial institutions should thoroughly implement the directives from the central financial work conference. They reiterated their commitment to "two unwavering policies" and once again emphasized the need to treat different ownership types of real estate enterprises equally in terms of reasonable financing needs. The instructions were clear: do not withhold loans, withdraw loans prematurely, or cut off loans for normally operating real estate companies; continue to make good use of the "second arrow" by supporting private real estate enterprises in bond financing and aiding real estate companies in raising reasonable equity financing through capital markets.
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