China Rejects $1 Trillion Housing Rescue Plan Pitched by IMF
- IMF recommends direct government financing of delayed projects
- China cites worries over moral hazards, bail-out expectations
This article is for subscribers only.
Chinese authorities have rejected a proposal made by the International Monetary Fund to use central government funds to complete unfinished housing, dealing a blow to hopes for more forceful support to an industry that’s been a major drag on the economy.
The IMF called on China to deploy “one-off” fiscal resources to complete and deliver pre-sold properties or compensate homebuyers, according to an annual review of the world’s second-largest economy published Friday. It put the cost at the equivalent of 5.5% of gross domestic product over four years.