Troubled Chinese Developers Struggle to Secure Funding Despite Whitelist Program

HONG KONG (Reuters) – Despite hopes for a boost in credit for China’s troubled housing market, new funding remains scarce according to Reuters interviews with bankers and developers, four months after the implementation of a “whitelist” of housing projects for loans.

Banks have been reluctant to increase lending to the embattled sector due to concerns over bad loans, which has further dampened confidence in the property market that is crucial for economic stability.

While some defaulted private developers have received new loans for “whitelist” projects since late March, the amounts granted have been relatively small, leaving the vast stock of unfinished housing projects largely untouched.

The slow roll-out of the “whitelist” lending program highlights the challenges facing Beijing as it seeks to support cash-starved developers and revive a sector that represents a significant portion of China’s GDP.

Despite efforts to jumpstart the market through policy measures, including the “whitelist” mechanism launched in January, the property sector remains a major drag on consumer spending and economic growth. The slow pace of lending approvals has prompted some developers to turn down new loans, citing concerns about repayment in a weak market.

With uncertainty looming over the housing market, the gap between expectations and reality remains a significant challenge for policymakers and industry players alike.

As the Chinese government continues to implement policies aimed at clearing unsold housing stock, the road to recovery for the property sector appears to be long and uncertain.

The Ministry of Housing and Urban-Rural Development and The National Financial Regulatory Administration have yet to comment on the situation.