China urges banks to stabilize real estate, Evergrande wants to sell $1.5 billion stake
Sylvie Claire / September 30, 2021
China's central bank has urged the country's banks to stabilize the housing market and combat speculation, as authorities fear that a bankruptcy of debt-laden giant Evergrande would rock the entire property sector.
Strangled by a debt of 300 billion dollars, the private group has been struggling for several weeks to meet its interest payments and apartment deliveries.
But the behemoth remains on the brink of collapse and its potential bankruptcy could rock China's real estate sector and even the national or global economy.
At a meeting Wednesday, the central bank called on financial institutions to stabilize land and housing prices and not use real estate as a means to stimulate the economy in the short term, according to a statement.
She also stressed that housing is for housing, not for speculation.
Faced with the risk of social unrest if Evergrande defaults, the Chinese government has not yet indicated whether or not it will intervene to help or restructure the group.
There are signs, however, that the authorities intend to prevent any protest.
Evergrande has already started to divest itself of certain assets. In particular, the group wants to sell a $1.5 billion stake in a regional bank.