Chinese regulators vow more financial support to tackle property sector crisis

Aug. 20 (UPI) -- Chinese regulators vowed on Sunday to provide more support to stabilize the country's teetering property market as South Korean officials sought to calm fears the crisis would spill across international borders.

The People's Bank of China, the National Financial Regulatory Administration and the China Securities Regulatory Commission released a statement to state-run media seeking to shore up confidence by vowing to strengthen credit support to tackle spiraling local government debt and property sector woes.

The statement urged more efforts be made to "continuously defuse risks and hidden dangers" in the wake of Thursday's bankruptcy filing by Chinese property giant Evergrande and deepening concerns about the resilience of the world's second-largest economy.

Another Chinese developer, Country Garden Group, has missed $22.5 million of debt payments, further fueling fears of a property market collapse in China, where companies accounting for 40% of Chinese home sales have defaulted since mid-2021.

In their statement, the Chinese financial leaders called for more coordinated efforts nationwide to tackle the issues and pledged "strengthened credit support for micro, small and medium-sized enterprises" as well for the green development, technological innovation and manufacturing sectors.

They also called for more economic stimulus from public infrastructure projects "that can be used both in everyday life and emergencies."

The People's Bank of China last week cut a key interest rate in an effort to spur growth as Wall Street banks lowered their 2023 growth forecasts for China's gross domestic product to barely over 5%.

Meanwhile, South Korean leaders on Sunday sought to calm growing concerns over the impact of China's property crisis in their own country.

Finance Minister Choo Kyung-ho met with Bank of Korea Gov. Rhee Chang-yong and other top financial officials to address the situation, the Yonhap news agency reported.

Finance ministry officials said the leaders "vowed to take measures to stabilize the market if necessary while closely monitoring related situations around the clock."