CBRC Heart DUN developers inadvertently take the land

The mouse in the bellows: Local government Summer portrait on one side is the bank supervision will dun side is the developers inadvertently take the property market with the deepening, previously ignored the local debt risk, suddenly highlighted.　　Recently, at the request of the State Council, the CBRC and the Ministry of Finance are working together to DUN local governments to clean up local financing platforms. At the same time, sales figures for May showed a sharp drop in property turnover, which meant that land finance would be tested. Under two pressing, how does the local government pay the money?　　Can the property market regulation continue? Peng Wensheng at, head of China research at Barclays Bank and chief economist, told the south reporters, according to Barclays, that even if the property market declines, the risk of local debt and even banks ' bad debts remains manageable. And if the property market regulation does not continue in the end, will not be able to avoid the next 10 years bubble burst. To this end, central regulatory determination is particularly important.　　Standard Chartered has suggested that local governments should reduce pressure by issuing debt. Local debt soared to 7 trillion days ago, China's Banking Regulatory Commission chairman Liu said in a briefing that the end of last year, the local government financing platform loan balance of 7.38 trillion yuan, an increase of 70.4% per cent, the general loan balance of 20.4%　　New loans of 3.05 trillion yuan a year, accounting for 34.5% of all new general loans. Data from the CBRC showed that by the end of May last year, the provinces, regions and municipalities have set up 8,221 investment and financing platform companies, of which there are 4,907 county platforms.　　From local platform company loan debt and local government financial resources, the debt rate is 97.8%, some urban platform companies loan debt rate is more than 200%. The central bank's research results are slightly better than those of the CBRC, but they are also shocking. The central bank pointed out that by the end of May 2009, the local government more than 3,800 investment and financing platform total assets of 9 trillion yuan, the debt rose to 5.26 trillion yuan, the average balance of assets of 60%.　　The debt of 5.26 trillion yuan is equivalent to 15.7% of the national G D p last year, 76.8% of the national revenue, and 161.35% of the local level revenue. Not only that, the CBRC data revealed that in the first quarter of 2010, 40% of the new bank loans were still flowing to the local government financing platform. According to CICC estimates, 2009 local government net new liabilities about 3 trillion yuan, is expected 2010 and 2011 follow-up loans of about 2 trillion-3 trillion yuan, the end of 2011 will reach 10 trillion yuan.　　That is to say, many local governments will have far more debt than they do at this level.　　Liu Yuhui, director of the Institute of Financial experiments at the Chinese Academy of Social Sciences, said that, according to the progress of normal infrastructure projects, the loan balance of local government financing platform would rise to 10 trillion yuan by the end of 2010, and 2011 would reach 12 trillion yuan.　　A string of figures reveals the truth that the government has been blind to the fact that the high stakes in local governments are huge. What about the Treasury and Bank Union Dun? The simplest truth is Shing. of local governmentsDun has been in place since the end of last year, culminating recently.　　At the end of last year, the Ministry of Finance had issued a notice calling for the regulation of debt and guarantee commitments by local governments and their platform companies, and the "guarantee letter" issued by local governments and the NPC in local government financing platform loans.　　May 26 This year, the State Council executive meeting also deployed to strengthen the local government financing platform for the management of the four initiatives, demanding to clean up and properly deal with financing platform company debt. Recently, the Bank of the news that the Banking Regulatory Commission to urge local governments to repay the term. Bankers have confirmed that the bank's self-examination of local government financing platform loans has come to an end, and will submit a report to the CBRC by June. From a large state-owned commercial bank, according to the requirements of the CBRC, to the end of March 2010 to put the local financing platform loans need to inventory, especially packaged loans, to "package open, by the pen comb, reassessment, rectification and preservation."　　The problems identified in the inventory, such as some local financing platform loans provided by the Government but without repayment sources, have been required to implement the repayment source. At the same time, the Ministry of Finance also issued a form requiring local statistics of their own debt, loan banks and so on.　　There are also reports that regulatory measures against local government financing platforms will also be introduced in the near future.　　Bashusong, deputy director of the Financial Institute of the Development Research Center of the State Council, told the media that cleaning up the local government financing platform would be the focus of macroeconomic policy normalization in the three quarter of 2010. Real estate sales drop sharply, but what does the local government pay?　　As the property market deepens, the money from the former land finance is shrinking. Recently, the property developers have disclosed the May sales figures, almost a bleak. Vanke May sales back to paragraph 51 100 million yuan, down 20, 2%, the chain down 34%.　　According to Vanke's sales figures, Vanke's sales in May compared to the first 4 months of the year, a significant decline in Vanke in May, showed that the appropriate price adjustment from April to 12322 yuan/square meter to 10087 yuan/square meters, the decline of 18%. In addition, the real estate May sales data for 1.2 billion yuan, 50% decline in April, Agile real Estate sales May 1 billion yuan, the chain April fell 30%, Longhu real estate sales 1.5 billion yuan, the chain down 40%.　　The country garden, with its modest performance, achieved 2.2 billion yuan in May, flat to the average in the past few months. Obviously, the dismal property market deal, will directly affect the developers to take the funds and enthusiasm, thus affecting the Government to land income. Liu Yuhui, director of the Financial Research Laboratory of the Financial Institute of the Chinese Academy of Social Sciences, said that at present there are few local financing platforms with stable cash flow to support repayment, and most local financing platforms still rely mainly on the support of the second repayment sources, such as land transfer revenue and local fiscal arrangement. A survey of National Gold Securities also recognizedFor, 75% of local financing platform loans are linked to land, leaving 25% to finance fallback.　　Thus, the property market regulation, directly weaken the local government's ability to repay debts.　　How can property market regulation continue under the debt crisis? Under two forces, what about local governments?　　How will the property market adjust to the risk of debt? For now, many people preach that the property market regulation will bring huge risks to local finance and even banks. Liu Yuhui, director of the Financial Laboratory Research Institute of the Chinese Academy of Social Sciences, said in an interview with the media that economic growth and property regulation determined the size of the risk. He counted the accounts, the local financing platform 7.38 trillion yuan of debt means that the value of the land as a bank mortgage amounted to 10.5 trillion yuan, and this amount is over 5 years of land transfer net income sum 4.4 times times. It would take 6.15 years to repay the 7.38 trillion-dollar debt with 2009 years of land income, and it would take 14.67 years to repay it with 2008 years of land income.　　Moreover, this does not include the natural growth of debt interest and loan balances for the next 2 years. Peng Wensheng at, head of the China Research department and chief economist at Standard Chartered Bank, held a different view.　　Peng Wensheng at told reporters in the south, there is no denying that real estate regulation will increase the local government's debt risk, and thus affect the banks, but these risks are controllable. Peng Wensheng at analysis, local government debt pressure is not big, will not go bankrupt, because of the government credit. As to the risk of passing on to banks, Peng Wensheng at said that even if the Chinese banking system were in extreme situations, such as a surge in bad debts and a decline in capital adequacy, the risk was only concentrated in the banking system, not as diffused as the subprime crisis, and because of the government credit guarantee, China's banks would not stop lending and still provide financing for economic development,　　This would not have a devastating effect on the real economy. Barclays calculates that even if property controls led to a sharp fall in house prices and a plunge in turnover, the Chinese economy would not have a hard landing;　　As for the decline in the supply of housing, Peng Wensheng at that public housing supply will be on top. By contrast, the bubble risk of the property market is much more intractable and has come to a level that is not regulated. Barclays yesterday published a report entitled "Regulation of the housing bubble", noting that in recent years, China's housing prices have soared, the housing bubble has been formed; but in the next 10 years, China will enter the age of population aging, the previous support for the rapid development of real estate, such as demographic characteristics, urbanization and income differentiation, high savings rate, will gradually weaken or even disappear. That means the housing bubble will burst sooner or later. And once the housing bubble burst, will cause economic shocks.　　To this end, the government must regulate the property market early so as to avoid a hard landing in the property market and pre-empt it to a reasonable level. Peng Wensheng at told reporters, according to his observation, the property market regulation is different from the past, strong, and took a number of fundamental measures to show the central government to regulate the end of the determination. LocalDue to land finance and debt pressure, it is unavoidable to interfere with the actual implementation of regulatory measures, even responded. And the effect of regulation will depend on the game of the interests of all parties.　　In Peng Wensheng at's view, the central government's regulatory determination is particularly important. As for how local governments pay their debts, Standard Chartered's advice allows local governments to make public debt. In fact, the central authorities are prepared. Recently, a number of provincial and municipal People's Congress approved by the Ministry of Finance issued the size of the 2010-year local government bond revenue and expenditure arrangements for the budget adjustment program.　　In other words, the Ministry of Finance agent issued 200 billion yuan local debt can be activated at any time. South Sinling Reporter