(Yicai) Dec. 7 -- The chairmen of China’s four biggest state-owned lenders have each expressed their bank’s support for resolving the country’s local government debt issue and preventing financial risks in the real estate industry, according to Xinhua News Agency. 

China Construction Bank will actively underwrite and invest in municipal bonds, Tian Guoli told Xinhua recently, following China’s twice-a-decade central financial work conference held at the end of October.

In the real estate domain, Beijing-based CCB will support the delivery of buildings and increase financial support for home leasing and affordable housing construction to help alleviate the risk of so-called “grey rhinos” in the sector, Tian added.

A grey rhino is a “highly probable, high impact yet neglected threat,” according to Michele Wucker, the US author who coined the term in 2013. “Grey rhinos are not random surprises, but occur after a series of warnings and visible evidence.”

Bank of China’s Ge Haijiao said the lender will actively help local governments in resolving existing debts and controlling incremental debts. It will also help them with attracting overseas investment, project matchmaking, major exhibitions, and other activities. BOC is also bolstering support for local real economies, science and technology innovation, and small and micro firms, Ge told Xinhua.

The central financial work conference, previously known as the national financial work conference, assesses China’s financial system and sets the direction for major reforms over the next five years. During this year's event, the central government emphasized the need to set up a long-term mechanism to prevent and resolve local debt and promote a virtuous cycle between finance and real estate.

To help prevent property market risks, Beijing-based BOC will also support the reasonable financing needs of developers under different ownership systems without discrimination, Ge said. It will continue to ensure the delivery of real estate credit, promoting the market-oriented clearing of industry risks and providing financial support for house leasing, urban village renovation, and affordable housing construction, he pointed out.

Industrial and Commercial Bank of China will support local authorities by lowering debt costs, alleviating debt repayment risks, and forming a long-term mechanism for risk prevention and resolution through market-oriented means, according to Chairman Chen Siqing.

With regard to real estate risks, Beijing-based ICBC will make concurrent efforts from the supply and demand side, meeting the reasonable financing needs of builders with different ownerships and vigorously supporting the housing needs of residents, he added.

Faced with the complex and changeable conditions, Agricultural Bank of China will improve the risk management policy system, optimize the digital risk control system, and insist on strengthening risk prevention and resolution in key areas, according to Chairman Gu Shu.

Editor: Martin Kadiev