China to set up housing finance division  

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(ECNS) – China will set up a housing finance unit under the China Development Bank (CDB) to fund the nationwide renovation of shanty neighborhoods, using low-interest loans.

The China Banking Regulatory Commission (CBRC) gave the green light to the independent housing finance unit on July 29. The CDB will provide loans at interest rates that are 10 percentage points lower than the market rate.

Yin Zhongli, financial analyst with the Chinese Academy of Social Sciences, said China pledged to set up a housing finance unit at the 3rd Plenary Session of the 18th CPC Central Committee last November. Yin said the move will support the sustainable development of housing renovation projects, which used to rely on the central and local governments for funding.

The CDB is a major financial player in propping up China's shanty neighborhood refurbishment. In the second quarter of 2014, the bank extended 219.5 billion yuan ($35 billion) in loans to help redevelop shanty households, according to bank president Zheng Zhijie.

China has already spent 1 trillion yuan ($161 billion) in 2014 and has pledged to redevelop 4.7 million homes this year, according to the Ministry of Housing and Urban-Rural Development.