(Bloomberg) — Chinese authorities have rejected a proposal made by the International Monetary Fund to use central government funds to complete unfinished housing, dealing a blow to hopes for more forceful support to an industry that’s been a major drag on the economy.
The IMF called on China to deploy “one-off” fiscal resources to complete and deliver pre-sold properties or compensate homebuyers, according to an annual review of the world’s second-largest economy published Friday. It put the cost at the equivalent of 5.5% of gross domestic product over four years.
That would amount to almost $1 trillion based on last year’s GDP, according to Bloomberg calculations. It’s a solution that China all but ruled out in an official response included in the report.
“We believe that we should continue to apply market-based and rule-of-law principles in completing and delivering these units,” said Zhang Zhengxin, the IMF’s executive director for China who was elected to the fund by the government in Beijing.
finance.yahoo.com/news/china-rejects-1-trillion-housing-100000832.html