PBOC, CBIRC emphasize efforts to protect rights of Chinese home buyers, ensure delivery of residential properties

China’s top banking regulators have emphasized ongoing efforts to protect Chinese home buyers following the recent debt crisis in the property development sector.

On November 21, the People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) jointly held the “National Commercial Bank Credit Conference” (全国性商业电影信贷工作座谈会) with the aim of “researching and developing work on the implementation of policy measures to use finance to stabilize the economy as a whole.”

The conference called for “improved legal guarantees and regulatory policy support for new collateral financing for special loans provided to secure the delivery of real estate; stimulation of accelerated execution of works for guaranteed delivery of objects; preserving the legal rights and interests of consumers of residential buildings, as well as promoting the stable and healthy development of the real estate market.”

The PBOC and CBIRC will work with commercial banks to “endeavor to efficiently provide various financial services to stabilize investment, accelerate consumption and protect people’s livelihoods; expand the intensity of credit support for key areas, weak links and industries and demographics adversely affected by the pandemic; and strive for a further return of the economy to stability.”

Nationwide commercial banks will need to “increase their responsibility, play a leadership role and proactively lean forward in their efforts” in areas such as:

• Effective use of financial instruments for policy development.
• Expanding the provision of medium and long-term loans.
• Drive accelerated formation of more significant volumes of work.
• It is better to use the key role of effective investment.
• Effective use of the combined power of special loans for the modernization and improvement of capital equipment and the policy of budget discounts.
• Active support of solvent demand in the sphere of production and services.
• Further expansion of support for micro and small enterprises, individual industrial and commercial registrants and truck drivers.
• Deferral of repayment of principal and interest on loans for financial inclusion to qualified micro and small enterprises.
• Active reduction of tariffs and transfer of profits to the real economy.

Regarding the real estate sector, the PBOC and CBIRC called for the “comprehensive implementation of long-term effective mechanisms for real estate; effective implementation of differentiated housing lending policies, as well as support for inelastic and improving demand for housing.”

“They also urged to “ensure the healthy and stable development of real estate financing; stabilization of loans to construction companies and loans for the development of real estate enterprises; support for rational demand for personal housing loans and support for rational deferrals of outstanding financing, including development loans and targeted loans, subject to ensuring the security of creditors’ rights”.