Analysis-Fall in China’s $1.3 trln land sales to test local finances, economy

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By Ryan Woo and Liangping Gao BEIJING (Reuters) – Sagging demand at China’s urban land auctions amid a crackdown on borrowing by private developers risks squeezing regional finances, pressuring local governments to scramble for other income sources to fund investments and support the economy. Land sales soared to a record 8.4 trillion yuan ($1.3 trillion) in 2020, the equivalent of Australia’s annual gross domestic product, bolstering fiscal budgets in a pandemic year. But tighter regulations on borrowing by private developers since the summer of last year are increasingly eroding demand for l…

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