China's Latest Plan to Save Developers Is Rubbish, Too
Remember the “three red lines?” The so-called three arrows program designed to facilitate financing isn’t working, either.
Same problems, new rubbish.
Photographer: Qilai Shen/Bloomberg
Things are supposed to be looking better for China’s embattled real estate developers. Home sales have turned the corner, and Beijing has softened its stern stance toward a sector that not so long ago threatened to imperil the broader economy with a cost of living crisis. Since late last year, the government has promoted stabilization in the housing market, reviving a so-called “three arrows” program to help private builders obtain bank credit and to make bond and equity financing easier.
Yet we’re seeing investors getting cold feet again. Some of China’s best-performing hedge funds have exited earlier lucrative wagers on property bonds. In recent days, the worst selloffs have occurred in some of the seemingly safe builders, such as the country’s biggest mall operator, Dalian Wanda Commercial Management Group Co.