The National Development and Reform Commission (NDRC) declared in a statement that it was taking steps to “regulate the implementation of projects and the use of funding” when it announced the new monitoring regulations in January.

“These measures are important to strengthen investment supervision… and improve the effectiveness of government investment,” it stated.

According to investment firm MSA Capital’s Ben Harburg, the regulations are a part of the Chinese government’s efforts to make sure that “funds being used to prop up struggling property developers are being used for their intended purposes,”said.

“Chinese developers have breached the trust of the Chinese government in the past by taking funds earmarked for completion of a project to pay off a coupon or even for personal use,” he said.

If circumstances permit, security tools such as satellite equipment, drones, and surveillance cameras must be utilized to monitor projects in accordance with the guidelines.

Among the world’s most surveilled citizens are those in China. China is home to hundreds of millions of surveillance cameras, which is thought to be half of all the cameras in the globe.

China wants to create “the biggest camera surveillance network in the world,” and all of this is part of that goal.

Artificial intelligence is used by several of the cameras, including facial recognition software.

Professor of Chinese politics David Goodman of The University of Sydney, on the other hand, said he does not find the new regulations “creepy, though there is an element of desperation,” from the authorities to supervise initiatives that are backed by the state.

“It is likely to have some results, and some of those may even be positive towards ensuring performance and social achievement,” he stated.

Given “widespread surveillance across the country,” Mareike Ohlberg, a senior fellow at the research tank German Marshall Fund of the United States, stated she “does not expect a move which is – at least in theory – geared towards monitoring how public funds are spent to generate a lot of backlash.”

The NDRC advises project developers to make advantage of additional technologies, such as big data, in order to promptly identify issues.

For comments, contact Evergrande, Country Garden, Sunac, and Longfor, among other prominent Chinese developers. As of yet, nobody has replied.

Chinese internet is captivated by a couple’s property ordeal.
The grave issues plaguing China’s real estate sector were brought to light this week when a Hong Kong court ordered the bankruptcy of Evergrande, a developer beset by debt.

Like many of its competitors, Evergrande borrowed billions of dollars to finance its rapid expansion.

But in 2020, regulations were put in place to limit how much big real estate companies might borrow. That contributed to the issue that the industry is now attempting to resolve.

Approximately 25% of the world’s second largest economy is derived from the property sector, which poses a significant challenge for the Chinese government.

“The property sector is the bellwether for the Chinese economy. Provincial governments depended on the sector to drive employment and meet growth targets. It is critical that the Chinese government shore up this sector to diffuse some global fears,” Mr Harburg said.

China’s housing ministry declared earlier this year that more rescue loans will be extended to developers “due to the existing financing challenges of certain real estate projects.”

Local governments have also been requested to provide a list of projects that require funding, according to an article published in China’s official housing ministry journal.

Additionally, banks that lent about 10 trillion yuan to the real estate industry last year have been pushed by Chinese politicians to keep funding faltering developers.

The largest reduction in required reserves for banks in over two years was announced by China’s central bank in January in an effort to assist free up funds to bolster the economy.

A senior official stated the financial sector had a “unshirkable responsibility” to real estate developers the day following the change.

“For projects that are in difficulty but whose funds can be balanced, we should not blindly withdraw loans, suppress loans, or cut off loans,” Xiao Yuanqi from the National Financial Regulatory Administration told a news conference in Beijing.

“We should provide greater support through extending existing loans, adjusting repayment arrangements, and adding new loans.”

Developers have been unable to finish projects due to issues in the real estate market, which has left millions of empty apartments around the nation.

In a nation where real estate makes up around 70% of personal wealth, the crisis has already left many home buyers waiting for their new properties.

Topics #(NDRC) #China