China will prioritize improving the balance sheets of top developers, according to the People's Bank of China's party secretary Guo Shuqing.

Along with ensuring the delivery of homes, the moves aim to promote the transition of the property industry to a new development model, Guo said in an interview with Chinese media.

This came amid reports that China will further relax its stringent "three red lines" policy that had exacerbated one of the biggest real estate meltdowns in the country's history.

Beijing may allow some property firms to add more leverage by easing borrowing caps, and push back the grace period for meeting debt targets set by the policy, according to people familiar with the matter.

The deadline could be extended by at least six months from the original June 30 date, the people said.

The so-called "three red lines" metrics that emerged in 2020, imposed strict debt and cash-flow targets on real estate firms, contributing to the avalanche of defaults and construction halts that sparked mortgage boycotts and plunging sales across the nation.

Meanwhile, Guo also encouraged online platforms to lead the development and to compete in the international arena, after 14 tech companies have basically finished the adjustments of their financial businesses, including Jack Ma's Ant Group.

Guo, who is also the chairman of the China Banking and Insurance Regulatory Commission, expects China's economic growth will return to the normal soon, now that Covid curbs have been lifted.

Staff reporter and Bloomberg

Guo Shuqing also wants China’s internet firms to compete internationally. REUTERS

Health of developers 'top priority'