BEIJING : The Chinese government's revenue from land sales slumped for a fourth month in October compared with year ago levels, as cash-strapped developers moved cautiously on land buying after tighter regulatory curbs on fresh borrowing.
Many developers including China Evergrande Group have grown desperately short of cash since authorities last year unveiled the"three red lines" - a key policy of President Xi Jinping that imposes limits on liabilities-to-assets, net debt-to-equity, and cash-to-short term borrowing ratios. "Declining land sales will constrain fiscal funding for infrastructure, leading Chinese regional and local governments to temporarily shift to debt-funded growth," according to a Moody's recent report."The unevenness in regional growth will persist, with developed provinces continuing to perform better than less-developed ones," according to Moody's.
In February, the Chinese land regulator imposed restrictions on land sales, allowing up to three auctions a year in 22 key cities including Beijing, Shanghai and Shenzhen, with the rules aimed at reining in rising land prices which could otherwise lead to higher home prices.