China directed banks to increase credit to struggling real estate developers Sunday in an effort to address the nation’s growing debt crisis, The Wall Street Journal reported.
The China Banking and Insurance Regulatory Commission (CBIRC) instructed banks to provide additional funds to eligible property developers whose projects have stalled, The WSJ reported. Analysts estimated that China’s at-risk mortgages amount to between $150 billion and $370 billion. (RELATED: Chinese Officials Will Soon Strap Electronic Monitoring Bracelets To COVID Patients)
Evergrande, one the country’s largest residential developers, defaulted under a $305 billion debt obligation in December 2021, causing a crisis of confidence to grip China’s real estate sector, Barron’s reported.
CBIRC’s directive comes after protests — both online and in-person — continued to spread across China last week, multiple sources reported. Experts, such as Gordon G. Chang, author of “The Coming Collapse of China,” believe the protests are symptomatic of China’s looming debt crisis, estimating that the nation’s total debt sits at 350% of GDP.(RELATED: US, Japanese Warplanes Run Joint Drills On China’s Doorstep)
Homeowners protested online against paying mortgages for unfinished properties last week, according to Reuters. The online petitions — which government censors reportedly removed — identified hundreds of properties belonging to major real estate developers who have defaulted on paying off debt, such as Kaisa Group Holdings and Evergrande Group, The Wall Street Journal reported.
Uniformed and plain clothes police also attacked demonstrators on July 10 outside a Bank of China in Zhengzhou protesting against being unable to withdraw funds, CNN reported. Chinese authorities claim that several individuals who were arrested on June 18 for misappropriating bank funds caused widespread cash shortages, the South China Morning Post reported.
Uniformed and plain-clothed security personnel run to approach demonstrators, outside a People’s Bank of China building, who are there protesting over the freezing of deposits by some rural-based banks, in Zhengzhou, Henan province, China July 10, 2022, in this screengrab from video obtained by Reuters. (Reuters)
A Chinese Embassy spokesperson told the DCNF that China was not facing an existential crisis.
“On the whole, China’s financial risks are under control and 99% of banking assets are within the safe boundary,” Liu Pengyu told the DCNF.
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.
