Economic Daily Jin Guanping: Financial support for Baojiao Building focuses on stable and sustainable plans | Deadline | Economic Daily
The People's Bank of China recently announced that it will extend the term of the Baojiao Building Loan Support Program until the end of May 2024. This plan is a structural monetary policy tool that supports financial institutions in issuing loans to sold, overdue, and difficult to deliver residential projects based on precise drip irrigation, positive incentives, and marketization principles.
The reason why the policy period has been extended is because financial support for building insurance is a systematic project that focuses on stability and sustainability. Specifically, it needs to address the funding gap of suspended projects, promote project resumption and delivery, improve the cash flow shortage of real estate enterprises, prevent the recurrence of unfinished projects, and comprehensively utilize various financial tools to repair the supply chain and industrial chain of the real estate industry. These tasks are time-consuming, involve a wide range of areas, and have a deep level of complexity, and are not short-term achievements. Only stable and continuous progress can achieve results.
To enhance the stability and sustainability of financial support for guaranteed delivery buildings, we should focus on three key areas.
Firstly, the exit of structural monetary policy tools should be stable and orderly. The establishment of the Baojiao Building Loan Support Plan aims to guide credit funds to flow into the Baojiao Building field. Financial institutions can apply for funding support from the People's Bank of China after making independent decisions and assuming their own risks to issue loans. In order to ensure stability, the tool has designed a "gentle slope" mechanism, which means that although the tool is withdrawn and the People's Bank of China no longer issues new funds, the already issued stock funds can continue to be used. The timely extension of the tool term undoubtedly further stabilized market expectations on the basis of a gradual decline.
Secondly, the supporting financing of commercial banks should be steadily implemented. The structural monetary policy tools play a guiding role, and the commercial bank loans that are matched and followed up are the main landing entities. Commercial banks should recognize that "ensuring the delivery of buildings, people's livelihoods, and stability" is not only a major decision and deployment made by the Party Central Committee and the State Council, but also a "win-win" work for banks and enterprises. Since the beginning of this year, several state-owned banks have launched guaranteed delivery building loans, effectively promoting the resumption of projects in various regions. Next, commercial banks need to enhance their sense of responsibility, seize the time window of policy extension, and ensure that supporting financing can keep up and be used well.
Thirdly, all relevant departments should strive for progress while maintaining stability and preventing secondary risks. Based on domestic and foreign experience, if regulatory measures are not in place when resolving risks, it is relatively easy to induce secondary risks, namely risks arising from the disposal of risks. Financial support should be combined with seeking progress while maintaining stability and addressing traffic congestion. On the one hand, we need to plug loopholes and strictly regulate the flow of funds for guaranteed building loans. Special loans should be closed and used exclusively for their designated purposes; On the other hand, we need to unblock obstacles and seriously investigate and deal with the illegal and irregular issues behind "difficult delivery". If pre-sale funds are found to be misappropriated, relevant institutions and personnel will be held accountable in accordance with the law and regulations.
Financial stability continues to support the construction of Baojiao Building, which requires both local attention and overall coordination. Focusing on local areas, we should focus on ensuring timely delivery of real estate, and comprehensively utilize credit, mergers and acquisitions, restructuring and other means to help the real estate industry clear risks and achieve a virtuous cycle. To coordinate the overall situation, we must ensure people's livelihoods and stability, collaborate to solve the payment problems of wages for migrant workers and upstream material suppliers, properly solve the payment problems of financial products related to real estate enterprises, effectively protect the legitimate rights and interests of all parties, and maintain social stability.
Source/Economic Daily