China’s property bubble is back in focus with regulators unveiling their latest set of stricter rules to rein in the Middle Kingdom’s runaway property market.
The China Banking Regulatory Commission is cracking down on trust companies, which are an important part of the nation’s byzantine shadow banking system and allow money to be funneled into property. The South China Morning Post has all the details:
Mainland regulators are tightening one of the last funding channels available to home builders under the nation’s shadow banking system, stepping up scrutiny on trust companies in an effort to curtail lending to the overheated real estate sector.
The China Banking Regulatory Commission (CBRC) will scrutinise violations in real-estate financing at trust companies, the China Securities Journal reported on May 23.
Citing a leaked document, the report said that officials will check whether trust companies are helping developers to circumvent CBRC-imposed leverage caps by offering additional debt or equity financing to developers.
On May 24 the CBRC issued a statement saying that it had given a special check list for its on-site inspectors but no formal policy document had been released. The CBRC routinely dispatch staff to financial institutions to check their compliance, and an ad hoc check list is used to guide their inspection priorities.
China’s big plans for a building a new Silk Road through its One Belt, One Road project is still generating headlines, with Bloomberg having an excellent story on how Southeast Asia could be a winner from China’s big cash splash on new infrastructure. Here’s a little taste:
Dominated by Japanese investment since the 1980s, Southeast Asia has found a new source of funds in China.
Chinese companies poured a record $14.6 billion of foreign direct investment into Southeast Asia in 2015, almost double from the previous year and a gargantuan leap from $156 million a decade ago, according to Maybank Kim Eng…