China lends helping hand to cash-starved property developers

HONG KONG – China’s government is signaling stronger support for property markets by cutting banks’ reserve requirement ratios (RRR), a move that will allow for more lending to companies and homebuyers, and a possible relaxation on property market curbs next year.

The RRR cut, which will inject 1.2 trillion yuan (US$188.4 billion) into the economy from December 15, will help support small and medium-sized enterprises (SMEs) while allowing state-owned banks to allocate more funds to the property sector, analysts said.

The politburo of the Communist Party of China (CPC)’s Central Committee said on Monday that the central government would support property markets and satisfy homebuyers’ demands in 2022. It skipped its usual slogan “houses are for living in, not for speculation,” signaling that some property curbs may be relaxed, analysts surmised.

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