Chinese property firms in insolvency to face restructure, bankruptcy: minister

Real estate companies that are seriously insolvent should be handled according to market-based principles and rule of law, either subject to bankruptcy or restructuring as appropriate, China's housing minister said on Saturday, pledging measures to promote the stable and healthy development of the real estate market.

Although the task of stabilizing the real estate market remains challenging, there is still great potential and room for growth in China's real estate sector. Development of the real estate market should be viewed from a medium and long term perspective, rather than short term perspective, Ni Hong, minister of housing and urban-rural development, told a press conference on Saturday during the ongoing two sessions.

"We believe that as long as we have confidence, respect the rules, and persist in solving problems as they arise, we can promote the stable and healthy development of the real estate market," Ni said.

This year's Government Work Report noted that China will refine real estate policies and meet justified financing demands of real estate enterprises under various forms of ownership on an equal basis, so as to promote the steady and healthy development of the real estate market.

Regarding measures to ensure stable and healthy development of the real estate sector, Ni emphasized focusing on stabilizing the market with city-specific policies, defusing risks, and promoting transformation of the sector.

In defusing risks, the financing needs, a prominent issue facing real estate enterprises, of all companies of different ownership types will be supported equally, Ni noted.

To meet the reasonable financing needs of real estate companies, a whitelist coordinating mechanism has been established covering 312 prefecture-level cities and above across China, Ni briefed.

From the reported whitelist projects, more than 6,000 have been completed, with 82 percent of these projects by privately-owned enterprises and mixed-ownership enterprises. As of the end of February, the approved loans through commercial banks have exceeded 200 billion yuan, according to Ni.

While pledging measures to meet the rational funding needs of real estate companies, the minister also emphasized the importance of continuing to strengthen supervision.

In 2023, faced with the individual real estate companies' funding chain breaking, the real estate market adjustment and other challenges, the ministry, together with relevant departments, have introduced a series of policy measures, securing the bottom line of preventing systemic risks, Ni said.

For behaviors from housing developers that harm the interests of the public, they should be resolutely investigated and punished according to law, making them pay the due price, the minister stressed.