China State Council Think Tank Meets Real Estate and Finance Sectors... Intervention in Liquidity Crisis?

[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Suhwan] Reports have emerged that officials from a think tank under the Chinese State Council met with representatives from the real estate industry and banking sector. Amid the escalating liquidity crisis in China's real estate sector, authorities appear to be intensifying their intervention to resolve the crisis by engaging with the relevant industries.

According to major foreign media on the 9th, the day before, think tank officials held meetings in Shenzhen with real estate companies Vanke and Kaisa Group, as well as representatives from banks including China Construction Bank, Ping An Insurance, and CITIC Bank.

During the meeting, Kaisa Group requested liquidity support in the market through methods such as signing construction project contracts with state-owned enterprises and strategic mergers and acquisitions.

According to sources, Kaisa Group complained that its current financial statements are very fragile and that the crisis is worsening due to banks' lending restrictions.

The company stated that some financial institutions have requested local courts to freeze its funds.

Vanke Group, one of China's top three real estate companies, currently has a sound financial situation but requested the implementation of more stable financial policies to prevent liquidity crises and structural risks.

The State Council's think tank does not play a direct role in policy-making but functions to propose major policies. Therefore, analysts suggest that the meeting reflected the government's intention to receive feedback from the real estate industry and assess the industry's actual conditions.

Previously, concerns were raised that the liquidity problems of Evergrande Group, China's second-largest real estate company facing bankruptcy with debts exceeding 300 trillion won, could spread risks throughout the Chinese market.

In particular, Evergrande narrowly avoided default by completing interest payments just before two bond interest maturity dates last month, but another bond interest maturity of $148 million is due on the 10th.

This content was produced with the assistance of AI translation services.