China plans real estate fund worth up to $44 billion for distressed sector, source says
China will launch a real estate fund to help property developers resolve a crippling debt crisis, aiming for a warchest of up to 300 billion yuan ($44 billion) in a bid to restore confidence in the industry, according to a state bank official with direct knowledge of the matter.
The move would mark the first major step by the state to rescue the beleaguered property sector since the debt troubles became public last year.
The size of the fund would initially be set at 80 billion yuan through support from the central bank, the People’s Bank of China (PBOC), the person, who declined to be identified due to the sensitivity of the matter, told Reuters.
He said state-owned China Construction Bank will contribute 50 billion yuan into the 80 billion yuan fund, but the money will come from PBOC’s relending facility.
If the model works, other banks will follow suit with a target to raise up to 200 to 300 billion yuan, he added.
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