China's Bold Move: State Giants to Acquire Unsold Homes

In a strategic move to stabilize its troubled property market, China is calling on central government-owned companies to step in and buy unsold homes from distressed developers. This bold initiative, first reported by Bloomberg News, aims to address housing oversupply and is part of wider efforts by Beijing regulators.

Major state-owned enterprises and bad debt managers, such as China Cinda Asset Management, are expected to play key roles in this operation. These firms are being authorized to tap into a 300 billion yuan ($41.83 billion) fund, initially set by the central bank for another housing initiative, to support this venture.

The origins of China's housing sector turmoil date back to 2021 when a clampdown on excessive developer debt led to a liquidity crisis. Coupled with unfinished projects and cautious buyers, the property market has been in flux. The central bank had earlier established a relending facility for affordable housing, encouraging state-owned enterprises to acquire unsold properties.

(With inputs from agencies.)