Finance developers to reduce debt, urges ex-PBOC adviser

Chinese authorities should provide enough financing to mainland developers to reduce their debts, a former adviser to the country's central bank says.

If sufficient financing is provided to real estate developers to prevent bankruptcy and defaults, and purchase curbs are lifted, property prices will stabilize in a year with prices in first-tier cities even stabilizing within six months, said David Li Daokui, director at Tsinghua University and a former adviser at the People's Bank of China.

His comments came as Hang Lung Properties' (0101) honorary chair Ronnie Chan Chi-chung said he remains positive about China's property sector and said the mainland's local governments should look at ways to obtain funding beyond land sales.

Meanwhile, China's Financial News, run by the PBOC, published an article reminding auditors to learn their lessons from job cancellations facing PwC and to act as gatekeepers of companies' operations properly.

PwC has been under fire for failing to find out that China Evergrande (3333) had overstated revenue at its main unit Hengda by 564 billion yuan (HK$494 billion) in the two years through 2020, and more than 20 firms have terminated PwC's services with the Bank of Hangzhou the latest firm to ditch the auditor.

In other news, China's services activity in May accelerated at its quickest pace in 10 months while staffing levels expanded for the first time since January, a private sector survey showed yesterday,.

The Caixin services purchasing managers' index for the sector rose to 54.0 from 52.5 in April, hitting its highest level since July 2023.