China's Private Property Developers Face Persistent Funding Constraints, Fitch Ratings Says

China’s private property developers continue to experience funding pressure amid weak internal funding from contracted sales, says Fitch Ratings. Funding assistance by authorities since late 2023 has also been hampered by a focus on the project level, rather than developers’ central operations, while state-backed developers are also struggling after several defaults and reports of difficulties in serving maturing debt.

Local governments in almost all of China’s cities have submitted thousands of whitelisted projects, largely from non-state-owned developers, requesting that banks consider granting loans, as guided by the government’s Coordination Mechanism for Urban Property Financing. The mechanism requires local authorities to provide detailed project information to banks to help them better evaluate projects and offer accelerated paperwork. About 6,000 projects have been submitted and over CNY200 billion loans granted as of 28 February 2024.