China’s Economy Czar Presses Cities on Funding for Real Estate

(Bloomberg) -- China’s top economic official called on city authorities to follow through on measures compiled by national policymakers aimed at easing the nation’s property market downturn.

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“All cities need to make timely efforts to establish the financing-coordination mechanism for the property industry and make sure it operates with high efficiency,” Vice Premier He Lifeng said Monday. He made the remarks in a meeting on how to better support publicly traded companies to help stabilize the country’s stock market.

The real estate recession has weighed heavily on China’s growth over the past two years, and hurt sentiment in the equity market. Economists and investors have aired concerns that the property slump will persist into this year.

China’s vice premier also called for implementation of the support measures for specific projects as soon as possible, according to a statement on the government’s website. But he also pressed local authorities to act against the diversion of so-called pre-sale funds now in escrow accounts. Cash raised from buyers before final property sales was a key source of builder financing during the boom years.

Read More: Evergrande Set for Liquidation as China Property Crisis Drags On

The prolonged property downturn has hurt China’s economic recovery as well as local authorities’ revenues, prompting all the top-tier cities to loosen curbs on the market in recent months.

Read More: China Extends Homebuying Easing to Beijing and Shanghai

Also at the Monday gathering, He asked officials to study and solve specific difficulties uncovered in their field trips to publicly traded companies. Governments need to help boost investor confidence and stabilize the capital market by increasing support for “high-quality listed firms” and promoting their high-quality growth, he added.

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