Financial institutions in China are being urged to take on unwavering responsibility and support property developers.

• Xiao Yuanqi, deputy director of China's National Financial Regulatory Administration, advised against blindly withdrawing, suppressing, or cutting off loans for projects facing difficulties but with balanced funds.
• Xiao suggested that we should offer more assistance by increasing the duration of existing loans, modifying repayment schedules, and introducing new financing options.
• The latest relaxation of financing guidelines for real estate firms is the focus of the official's attention.

The Chinese financial regulatory official advised that China's financial institutions should provide strong support to the struggling real estate sector and avoid blindly withdrawing financing for projects facing difficulties.

The Chinese central bank's largest cut in mandatory cash reserves for banks since 2021 has been met with strongly worded comments from Beijing, which has also recently released a fresh policy mandate aimed at easing the cash crunch for Chinese developers struggling under the crackdown on the sector's bloated debt.

According to a CNBC translation, Xiao Yuanqi, deputy director of China's National Financial Regulatory Administration, stated at a press conference in Beijing on Thursday that the financial industry has a non-negotiable duty to offer robust support.

The real estate industry chain is extensive and encompasses various aspects. It significantly influences the national economy and is closely tied to individuals' lives.

Local government finances in China are closely linked to real estate troubles since they heavily depend on land sales to developers for a substantial portion of their revenue.

Beijing's crackdown on developers' debt-driven growth in 2020 led to a slump in the property market, which in turn affected consumer growth and the broader economy in China, the world's second-largest economy.

Xiao advised against blindly withdrawing, suppressing, or cutting off loans for projects facing difficulties, but instead recommended providing greater support by extending existing loans, adjusting repayment arrangements, and adding new loans.

Xiao warned that the new funding guidelines, which are only valid until the end of the year, are intended to be targeted.

Xiao stated that China's state banks will provide operating property loans to real estate companies based on manageable risks and commercial viability.

Real estate companies may repay their existing loans using loans provided by eligible property developers, who may also use these loans to open market bonds.

Official reports indicate that China's Ministry of Housing and Urban-Rural Development held a meeting Friday morning to emphasize that local regions can adapt the newly released property policy guidelines as needed.

The meeting is one of several this week, indicating official efforts to expedite the implementation of recent policy declarations.

On Wednesday, Beijing made a rare move to announce stimulus measures and share the news at a press briefing, indicating the Chinese government's intention to stabilize its stock markets, which are on the brink of collapse.

The People's Bank of China Governor Pan Gongsheng made an announcement in person about the forthcoming reserve ratio requirement cut and real estate policy.

In his address at the World Economic Forum in Davos, Chinese Premier Li Qiang revealed the country's annual GDP growth figure a day before the National Bureau of Statistics was set to release the official data.

— CNBC’s Evelyn Cheng contributed to this story.