Tyler Durden
"In a move which analysts say marks a 'significant shift' in Beijing's strategy to assist distressed builders and boost confidence in China's sinking housing sector amid the deepening property crisis, overnight Beijing included property giants Country Garden Holdings (whose collapse would be orders of magnitude worse than that of Evergrande) and Sino-Ocean Group to China's draft list of 50 developers eligible for a range of financing support which we profiled earlier this week.
As Bloomberg anchor Sofia Horta e Costa notes, 'Country Garden was previously the leading developer by sales with numerous ongoing construction projects. If China aims to bolster confidence among homeowners and buyers, ensuring that projects will be completed and delivered seamlessly even in the event of a developer default, then this is the way to go.'
CIFI Holdings Group, another builder that has missed debt payments, was also included on the white list according to Bloomberg, which adds that regulators are set to finalize the roster and distribute it to banks and other financial institutions within days.
The inclusion of distressed builders such as Country Garden, which missed payments on a dollar bond for the first time last month, underscores regulators’ shifting stance toward some of the nation’s biggest private developers as the refusal of the relentless property crisis to ease. Chinese President Xi Jinping has also stepped up support for the broader economy, issuing more sovereign debt for infrastructure spending, raising the budget deficit ratio and even making an unprecedented visit to the central bank.
Then again, not a day goes by this year when we are not inundated with the latest Chinese 'news' and 'plans' of a moderate stimulus, one which never actually materializes, however, and which is just recycled into the next newscycle where readers completely forget that they are just reading recycled news over and over."