China Tightens Use of Property Proceeds as Fed Sees Risks

A growing number of cities in China have tightened supervision over the use of presold property proceeds, a move likely to deepen the cash crunch at many of the country’s real estate developers that have relied on the inflows as a key source of funding.

Major cities including Beijing, Tianjin and Shijiazhuang as well as smaller municipalities like Suzhou and Nantong in the eastern province of Jiangsu, and Luohe in central Henan province have issued rules tightening oversight of the proceeds, according to a China Business News report and government statements.