China's asset management association has banned registration of private equity schemes for residential property investment in 16 cities where it says the market has overheated.The Chinese article's headline refers to this move as a "band tightening spell," for those familiar with Journey to the West.
iFeng: 重磅消息突袭楼市 这16个城市被套上“紧箍咒”
It is clear that the real estate enterprises that are allowed to finance by means of entrusted loans, trust plans and accepting assets will be directly affected by the private equity management plan.The government is targeting debt financing disguised as equity:
...Sun Haibo, founder of the Institute of Financial Supervision, it seems that although 16 projects outside the city can still finance, but "strict control of real estate enterprises to obtain liquidity and land transfer financing financing" has been the policy tone.
Sun Haibo that the trust company used to evade the banking sector on the real estate industry financing limit is the most important means of "Ming shares of real debt", because this name does not look at the financing of the project qualification or funding purposes. However, the debt of such financing is too weak to circumvent the supervision of the CBRC, but it will lead to legal risks. Therefore, this restriction will help to reduce the systemic risk, but the financing channels of housing prices will inevitably be tightened.
Well-known real estate expert Xue Jianxiong also believes that the regulation can be described as all-round, the focus is to avoid systemic financial risks.