China’s real estate renovation is too cosmetic

Redco Properties

26/05/2022 02:44

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are her own.)
    By Jennifer Hughes
    HONG KONG, May 26 (Reuters Breakingviews) - The central bank
joined wider efforts to help the property sector by cutting
five-year lending rates to 4.45%. Banks remain sceptical of
developers however, and bonds are trading at distressed prices.
Lack of faith in the industry’s foundations make it harder to
build a recovery.
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    CONTEXT NEWS
    - China’s central bank on May 20 lowered the benchmark
five-year lending rate to 4.45% from 4.6%, a bigger cut than the
5 basis points to 10 basis points that was expected.
    - Residential property sales fell 32% in the first four
months of 2022 from a year earlier, according to figures
released on May 19 by China’s National Bureau of Statistics. 

 (Editing by Jeffrey Goldfarb and Katrina Hamlin)
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