The People’s Bank of China (PBOC), the country’s central bank, and the China Banking and Insurance Regulatory Commission (CBIRC), the chief regulator of the banking and insurance sector, jointly issued a circular at the end last year. It encouraged large state and private enterprises to merge and purchase (M&A) “high-quality projects” from real estate developers who are plagued by operational difficulties. It also urged financial institutions to provide these enterprises with the services that were needed for the acquisition.
At the beginning of this year, with support from the central government, the banking industry started to ease financing restrictions and release funds to support mergers and acquisitions. The number of real estate related M&A cases is on the rise.
The banking industry has injected at least 58 billion yuan ($US 9.15 billion) into the economy by issuing bonds, loans and other securitized assets.
A researcher at PBOC said, “Because of the lack of capital in the real estate industry, it is difficult to see large-scale M&A activities by the industry leaders. For some time in the future, banks will be an important source of funds.”
Source: Central News Agency (Taiwan), February 21, 2022
https://www.cna.com.tw/news/acn/202202210070.aspx