China urges banks to extend loans to real estate companies after homeowners halt payments

Synopsis

In China, home buyers are furious over the delayed completion of their properties, leading tens of thousands to withhold payments for unfinished projects across at least 50 cities. This widespread boycott arises from the financial struggles of real estate developers, exacerbated by the COVID-19 pandemic, which has caused banks to halt loans to these companies. The real estate sector, crucial to China's economy, accounts for up to 30 percent of the country's GDP. In response to the crisis, China's banking regulator urges banks to extend credit to support construction and mitigate fears of financial contagion. Correspondent Tsung Han in Taipei discusses the implications of this situation, highlighting the significant leverage issues faced by developers and the impact on buyers who have invested their life savings into these projects. The Chinese government emphasizes the importance of ensuring the delivery of buildings while managing financial risks within the sector.