The Central Financial Work Conference held recently emphasized the need to comprehensively strengthen financial supervision, effectively prevent and resolve financial risks, and increase the effectiveness of financial supervision. This meeting signals a clear focus on both addressing current risks while also regulating the long-term development of the industry. As part of its initiative to comprehensively strengthen financial supervision, the conference stated the necessity of improving the supervision system and capital supervision of real estate enterprises, as well as macro-prudential management of real estate finance.
The conference also addressed the need to promote a virtuous cycle between finance and real estate and meet the reasonable financing needs of real estate enterprises without discrimination. This includes strengthening the supervision over activities and capital flows of leading real estate companies, as well as the improvement of macro-prudential management of real estate finance.
Experts and industry insiders have recognized the importance of this emphasis on supervision and the proposed coexistence of subject supervision and capital supervision as a way to prevent risks and ensure the long-term development of the industry. According to Yuan Haixia, executive director of China Chengxin International Research Institute, “strengthening supervision can be understood as improving the supervision of entities and funds at the micro-level, and improving the macro-prudential management of real estate finance at the macro level.”
The initiative to promote a virtuous cycle between finance and real estate has been seen as a proactive measure to set the tone for real estate development. It will not only have a stabilizing effect on the real estate market in the short term but will also contribute to the long-term stable and healthy development of the industry.
In addition, the Central Financial Work Conference has also taken steps to address the financing needs of real estate companies of different ownerships equally, recognizing the importance of promoting fair competition among enterprises and effectively mitigating risks while ensuring the support of reasonable funding needs.
Overall, the spirit of the Central Financial Work Conference has set clear expectations for the strengthening of financial supervision and the promotion of a virtuous cycle between finance and real estate, aiming to ensure the stable, healthy, and high-quality development of the real estate market. With the gradual implementation of the conference’s initiatives, it is expected that relevant departments and localities will introduce specific measures to further stabilize and boost industry expectations.