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Local financing approved for affordable housing

By Yin Mingzhe (chinadaily.com.cn)
Updated: 2011-06-21 17:05
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The National Development and Reform Commission (NDRC) has sent a notice to local governments clearly indicating financial institutions and enterprises can apply to issue corporate bonds as a finance method for affordable housing, Shanghai Securities News reported Tuesday.

It means the present financing bottleneck will be relieved and it is expected investments and constructions of affordable housings will accelerate in the third quarter, according to industry insiders' analysis.

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The notice said corporate bonds have the merits of low interest rates and long-term duration, and therefore are good financing tools for affordable housing. The funds raised by the bonds should give priority to local affordable housings. Only if affordable housing projects have been completed, can funds be used in other projects.

Chinese Vice Premier Li Keqiang recently stressed the importance of affordable housing, saying the project is not only beneficial for the public but also can increase the housing supply, deflating soaring real estate prices. It is also beneficial to optimize investment structure, enhance domestic consumer spending, and promote industrial development.

The affordable housing project is set to become the largest program in the second half of this year, which will spur the development of the national economy and boost the growth of other industries such as cement and glass, the newspaper reported.