Years of regulatory curbs on borrowing via typical channels has plunged the sector into a deep crisis, highlighted last year by the troubles at China Evergrande Group - once the country's top-selling developer and now the world's most indebted property company with $300 billion in liabilities.
Guided by the cabinet-level Financial stability and Development Committee, the sector's main regulator the Ministry of Housing and Urban-Rural Development and other authorities are drafting the new rules, three of the people said. The State Council Information Office and the Ministry of Housing and Urban-Rural Development did not immediately respond to requests for comment.Chinese developers are allowed to sell residential projects before completing them, but are required to put those funds in escrow accounts. The cash held in escrow typically accounts for 50%-70% of developers' pre-sale funds, one of the people said, without giving an estimate on the amount held.
The proposed new rules are aimed at allowing developers to use escrow funds to first complete unfinished buildings and then for other purposes, three of the sources said.
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