MNI China Press Digest Jan 3: PSLs, Developers' Debt, NDRC

Highlights from Chinese press reports on Wednesday:

• The People's Bank of China made CNY350 billion in loans to policy banks through its pledged supplementary lending (PSL) facility in December, according to a statement on its website Tuesday which did not specify the use of the loans. The market expects PSLs may be used to support the construction of "three major projects", namely affordable housings, urban village renovation and pubic infrastructure, which requires large amounts of medium and long-term low-cost funds. Ming Ming, chief economist at CITIC Securities estimated the scale may expand further. The PSL interest rate is 2.4%, 10bp lower than the one-year Medium-term Lending Facility rate. The programme, created in 2014, was mainly used to support shanty-town renovation between 2015-2018. Outstanding PSL loans were at CNY3.25 trillion by end-Dec, PBOC said. (Source: Yicai.com)
• Developers will face higher debt repayment pressure in 2024, as the financing scale of real-estate companies shrinks for the third consecutive year, Yicai.com reported. Despite repeated support pledged by authorities and loose financing policies, the total new financing of typical developers fell by 28% y/y throughout 2023, compared to the 34% and 24% declines in 2022 and 2021, according to data by China Real Estate Information Corporation. The total principal amount of domestic and overseas bonds due in 2024 will reach CNY737.3 billion, a rise of 11.3% from 2023, data by Fitch Ratings showed. There is a risk of defaulting for a second time given the disappointing financing and sales, Yicai reported, citing analysts.
• The National Development and Reform Commission will accelerate the legislative process of the Private Economy Promotion Law and improve multi-level communications with private enterprises, said NDRC Director Zheng Shanjie at a meeting in Jinjiang city on Tuesday. The NDRC will strengthen project promotion and encourage more private capital to participate in the construction of major national projects. It will also improve indicators to monitor the situation of the private economy, according to Zheng. (Source: 21st Century Business Herald)