China announces new measures to rescue struggling property sector

China announced on Thursday that it will increase lending to its struggling property market by the end of the year to help renovate 1 million dilapidated housing units.

At a news conference, Chinese Housing Minister Ni Hong said Beijing would “increase the amount of loans for whitelisted projects [a mechanism by which municipalities recommend to banks which real estate projects should receive priority financing] to 400 billion yuan [about $562 billion]. To 400 billion yuan ($562 billion) by the end of 2024.

The housing and construction sector has long accounted for more than a quarter of the gross domestic product in the world’s second-largest economy.

However, since 2020, the sector has been hit by authorities tightening lending conditions for property developers, with some of the sector’s giants on the brink of bankruptcy.

“One million dilapidated urban homes are set to be renovated,” Ni Hong said.

“There are a lot of safety hazards and undesirable living conditions in urban towns. “People want modernization.”

The authorities expect growth of “around 5%” again this year, but analysts believe that target is too optimistic given the many obstacles facing the world’s second-largest economy.