Beijing Encourages Banks to Issue Bonds to Support Loans for Welfare Rental Accommodation

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The Chinese central government has called for banking sector financial institutions to use debt issues to raise funds for the financing of welfare rental accommodation.

On 2 July the State Council issued the “Opinions Concerning Accelerating the Development of Welfare Rental Residential Housing” (国务院办公厅关于加快发展保障性租赁住房的意见).

The Opinions call for “expanding the vigour of lending support for the development of welfare rental residential housing, and supporting banking sector financial institutions to employ market-based methods to provide long-term financing to entities that hold welfare rental residential housing themselves.”

The Opinions further call for:

  • The provision of loans to residential leasing enterprises that improve existing housing to create non-self-owned welfare rental residential housing.
  • Improve statistical systems that suit loans for welfare residential rental housing.
  • The provision of differentiated treatment of the issuance of financial bonds by banking sector financial institutions during the regulation of real estate lending.
  • Raise funds to make loans to welfare rental residential housing.
  • Support enterprises in the issuance of enterprise bonds, corporate bonds, non-financial enterprise debt instruments and other bonds for the development and operation of welfare rental residential housing.

“Residential housing difficulties of new urban residents and the young remains pronounced, and requires accelerated improvements to a residential housing welfare system based mainly on public rental housing, welfare rental housing and jointly-owned residential housing,” said the State Council.

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