CBIRC says Evergrande won't have negative impact

Property developer China Evergrande Group's recent default on guaranteed obligations won't have a negative impact on the safe and sound operation of China's banking and insurance industries, said the spokesman of the China Banking and Insurance Regulatory Commission (CBIRC) on Friday.

Currently, financial debts of Evergrande account for around a third of its total liabilities with a diversified creditor structure, and the amount of Evergrande's investment in financial institutions is quite limited, said the spokesman during a phone interview with the China Banking and Insurance News.

The CBIRC believes regulatory authorities in relevant jurisdictions will handle this issue in a law-based and fair manner. Currently, the Guangdong provincial government and other relevant local governments and agencies are guiding and urging Evergrande and its affiliates to resolve risks steadily and orderly in accordance with laws and regulations, and to proactively resume and complete housing construction for delivery to buyers. Financial institutions including banks and insurance companies are also actively participating in relevant work, he said.

The spokesman emphasized that there will be no change for the principles and stance upheld by financial regulators in protecting the legitimate rights of consumers, investors and businesses according to the law. Moreover, there will be no change for China's market-oriented financial reform and opening-up under the rule of law and in accordance with international standards.

The CBIRC will follow government policies and encourage banking and insurance institutions to provide financial services for the real estate and construction sectors according to prudential principles.

At present, in line with specific circumstances of different localities, the mortgage demand of first-time home buyers as well as homeowners with improvement needs will be satisfied as a priority, development loans and merger and acquisition loans will be extended properly, and low-rent public housing projects will be further supported, to promote stable and healthy development of the real estate industry and market in China, he said.