China’s Minister of Housing and Urban-Rural Development, Ni Hong, declares that insolvent real estate companies should go bankrupt or be restructured, emphasizing adherence to the law and market principles. The warning comes amidst defaults by major developers and a government focus on reducing the role of real estate in the economy.
1. Struggling Chinese real estate developers will not receive major bailouts, according to Ni Hong, China’s Minister of Housing and Urban-Rural Development.
2. Developers deemed seriously insolvent and unable to operate should undergo bankruptcy or restructuring in line with legal and market principles.
3. Ni stresses that those harming the interests of the masses will face investigations and punishment in accordance with the law.
4. The warning follows defaults by major developers like Evergrande, and a decline in new home sales, raising questions about future business viability.
5. China’s 2020 crackdown on developers’ debt reliance aimed to curb property market speculation, but many developers faced financial challenges.
6. Authorities have introduced measures to provide financing to some developers, but the national stance on reducing the real estate sector’s role remains unchanged.
7. Premier Li Qiang’s government work report emphasizes fostering a new development model for real estate, with a focus on government-subsidized housing and improved commodity housing systems.
