China is trying to solve its woes

China will increase bank lending to stalled real estate projects to 4 trillion yuan, or about 518 billion euros, by the end of the year.

The issue was reported on Thursday by, among others, a British financial magazine Financial Times and news agency Reuters.

The purpose of the additional funding is to support unfinished real estate projects so that stalled construction projects can be completed.

The promise to increase lending is part of China’s efforts to stabilize the country’s real estate sector and revive the economy.

In recent weeks, the authorities have announced a slew of measures aimed at turning the economy towards growth.

One of the main problems

Portfolio manager of the Evlin Emerging Markets corporate loan fund Juha Mäntykorpi reviews Kauppalehti in an extensive article in August that the real estate sector is one of the central problems of the Chinese economy.

“The decline in construction cannot be compensated for unless household consumption is boosted”, Mäntykorpi estimated at the time.

According to Mäntykorvi, two other key problems of the Chinese economy are declining net exports and weakened household consumption.

The promised increase in lending did not meet investors’ expectations. According to the Financial Times, shares of Chinese real estate companies fell on Thursday.