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Chinese banks ask property developers for money back

Chinese banks ask property developers for money back

(China) Almost half of China’s 30,000 property development companies could suffer severe cash shortages if China’s commercial banks adhere to new guidelines and recall some $21 billion dollars in short-term loans. According to a report in China’s state press, the country’s central bank issued new guidelines which prevent property companies from using bank loans as "current capital".

The move is expected to lead to greater consolidation within China’s property sector with larger companies swallowing struggling smaller ones.

Some 130 to 180 billion of the 900 billion yuan in loans to property development companies could be recalled by the banks.
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