China's latest state-backed effort to help the struggling property sector is set to be set up by the China Construction Bank CCB, which plans to set up a 30 billion yuan US $4 billion fund to finance rental housing.
The state-owned lender, which will provide money for the fund, plans to invest in real estate projects and turn them into affordable rental houses, CCB said late on Friday Sep 23 that Beijing has been stepping up efforts to help a real estate sector hit by debt buildup, mortgage boycotts and sluggish sales. Construction and property account for more than a quarter of China's economy.
In July, Reuters reported that China planned to launch a real estate fund to help property developers deal with a crippling debt crisis. The fund would initially be set at 80 billion yuan with the support of China's central bank, with CCB contributing 50 billion yuan, a source said.
China's policy banks and local governments have set up funds to help cash-strapped developers finish the construction of pre-sold properties, as protests from home buyers spread.