According to Bloomberg , Country Garden and Sino-Ocean Group have been included by Beijing on a draft list of 50 developers eligible to receive a range of government financial support.
The move signals that China may have begun to help some of the country’s most indebted property developers. Regulators will finalize the list and send it to banks and other financial institutions in the coming days.
The appearance of troubled names like Country Garden on the list suggests that the views of Chinese regulators are changing.
Country Garden defaulted on its offshore bonds for the first time last month, raising concerns among homebuyers as Country Garden’s ability to complete and deliver projects threatens to exacerbate its liquidity crisis.
The move signals that China may have begun to help some of the country's most indebted real estate businesses (Photo: VCG).
However, some investors worry that the list only includes state-owned real estate companies and leaves out struggling businesses that are most in need of support.
Ms. Ting Meng, credit analyst at ANZ Bank, said that the Chinese government has changed its attitude towards the real estate sector dramatically, with more active support measures.
For real estate developers who cannot repay their debts, new cash infusions should be prioritized for handing over houses rather than paying off debts, experts say.
China's property crisis has engulfed most of its biggest developers, with many now struggling to repay debts and complete projects they have already sold.
Vanke, one of the few remaining companies, also saw its dollar bonds plunge after Country Garden defaulted. Vanke later received unexpected help from the local government.
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