Country Garden shares jump after China signals fresh support
by AFP Staff Writers
Shanghai (AFP) Nov 23, 2023

Shares in heavily indebted Chinese developer Country Garden soared more than 17 percent on Thursday as signs emerge that Chinese officials are planning more concrete support for the troubled sector.

One of the biggest players in China's property industry, Country Garden has racked up debts estimated in June at 1.36 trillion yuan ($191 billion).

It is just one of many companies, including Evergrande, caught up in a sector-wide crisis that has seen a string of debt-laden builders either defaulting or threatening to do so, fuelling fears of a spillover into the wider economy.

Bloomberg News reported on Wednesday that Country Garden, which is listed in Hong Kong, was on a draft list of 50 developers that would be eligible for more financial support, citing sources with knowledge of the matter.

The list compiled by regulators includes private and state-owned developers and is intended as a guide to banks considering shoring up companies via a variety of mechanisms, Bloomberg said.

Sino-Ocean Group, another company reportedly on the list, soared more than 30 percent in Hong Kong. Among other developers, China Evergrande rose almost six percent and Kaisa Group was up more than seven percent.

Authorities are on edge as the creeping debt crisis fuels buyer mistrust, sends home prices plummeting and, crucially, threatens to infect other sectors in an already sluggish economy.

Construction and real estate account for around a quarter of China's gross domestic product.

In another sign that the government is preparing to offer the sector more support, China's rubber-stamp parliament on Wednesday released a report calling for banks to do more for the industry.

The document, from a meeting last month with the head of the People's Bank of China, said banks should step up help for developers to enact the "guaranteed delivery of buildings".

Over recent years, companies' failure to complete projects has sparked protests and mortgage boycotts across the country.

The document also called for financial institutions to "support the reasonable financing needs of real estate companies, reduce the risk of credit defaults, and alleviate the fears of residents purchasing long-term housing".

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