China scrambles to defuse alarm over mortgage boycotts and banks runs
On Sunday, the China Banking and Insurance Regulatory Commission urged banks to increase loan support for real estate developers so they can complete unfinished projects, as thousands of disgruntled homebuyers Buyers across 18 provinces and 47 cities had stopped making payments by last Wednesday, according to multiple state media reports and data compiled by Shanghai-based research firm China Real Estate Information Corporation.The regulator pledged Sunday to work closely with local governments to ensure timely delivery of unfinished residential projects, according to a report by Stocks in the region were also partly boosted by hopes for more stimulus from China. The Hang Seng Index climbed 2.7% while the Shanghai Composite gained 1.6%. But analysts advised caution.”While this move [by the regulator] is encouraging, the issue is very complicated and it is unlikely the CBIRC will be able to handle it on its own,” said Nomura analysts on Monday.Anger over bank runsTo address rising public anger over Protestors launched a mass demonstration earlier this month in Zhengzhou city, Henan province, which was crushed violently by authorities. It was the largest protest yet by the depositors, who have been fighting for months to retrieve their frozen savings.Policymakers in the world’s second largest economy are facing mounting challenges to keep growth steady, as the country contends with a sharp slowdown in activity due to Beijing’s stringent zero-Covid policy, a bruising regulatory crackdown on the private sector, and a real estate crisis that is causing rising bad debts at banks and growing social protests.On Friday, China reported its gross domestic product, the broadest measure of its economy, grew 0.4% from a year ago in the second quarter. That was the weakest performance since the first quarter of 2020.
