China land sales revenue falls at faster pace, squeezing local governments
CHINA’S government land sales revenue fell at a faster pace in October, official data showed on Wednesday (Nov 15), adding to fiscal strains on the country’s local governments as cash-strapped property developers remain cautious about buying more land.
Revenue from land sales fell 25.4 per cent in October from a year earlier, extending a decline of 21.3 per cent the prior month, according to Reuters calculations based on data from the finance ministry.
Revenue fell 20.5 per cent in January-October year on year.
Land sales, a major source of local governments’ revenue, have fallen sharply since last year, as many property developers are struggling to repay debts and finish presold housing projects after Beijing tightened curbs on borrowing.
Debt-laden local governments represent a major risk to the Chinese economy and its financial stability, economists say, amid a deepening property crisis, years of over-investment in infrastructure and huge bills to contain the Covid-19 pandemic
Beijing is strengthening efforts to minimise the broader risks posed by the local government debt.
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Reuters reported last month, citing sources with knowledge of the matter, that China has told state-owned banks to roll over existing local government debt with longer-term loans at lower interest rates. REUTERS
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