China to Support Financial Institutions Hit by Real Estate Slump... Tens of Trillions Fund Established

by Mun Jewon

Published 24 Jun.2024 19:44(KST)

Chinese President Xi Jinping is attending the 2nd plenary session of the National People's Congress (NPC) held at the Great Hall of the People in Beijing on March 8, drinking tea. [Image source=Yonhap News]

China is preparing tens of trillions of won in funds to prevent a financial crisis caused by the real estate market slump.

On the 24th, according to Nikkei Asia and others, the Chinese government plans to establish a 'Financial Stability Guarantee Fund' to assist financial institutions struggling due to the real estate downturn.

Since the collapse of financial institutions amid the real estate recession could put the entire financial market at risk, the policy is to inject funds into financially troubled institutions.

The contributions will mainly be collected from financial institutions and financial infrastructure companies such as payment firms.

The Chinese government has so far raised about 65 billion yuan (approximately 1.4 trillion yen), but a government official stated, "Ultimately, the scale will reach several hundred billion yuan (tens of trillions of won)."

The Standing Committee of the National People's Congress will review the second amendment of the Financial Stability Act containing these details at a meeting on the 25th.