China’s local government financing vehicles are rushing to buy vast quantities of land as the property crisis continues.
According to official data, land acquisitions by LGFVs rose to Rmb400bn ($57bn) in the first half of the year, up more than 70% compared with the same period in 2021. This is despite overall land purchases, which have previously been dominated by private developers, falling by almost a third as Beijing cracks down on real estate speculation.
Local governments have traditionally relied on LGFVs to support growth by spearheading infrastructure investment. Now, the financing vehicles are being called upon to prop up the real estate sector, which accounts for about one-third of total economic output.
