A Study of Financing Risk Management in Land Reserve

摘要

The land reserve was introduced to China twenty years ago. It stimulates the real estate markets and accelerates the urban development as well as economy developing. Financing risks are concerned much during the course of land reserve development, due to their characters of huge in scale, long payment periods and difficulties of repayment. Some financial tools including bank loans, entrusted loans and insurance funds become common methods of funding for the land reserve. This paper analyses the land reserve project costs in Beijing from 2001 to 2014 and categorizes the current financial risks as following four types: policy risk, interest rate risk of commercial banks, scale risk, and project operation risk. It suggests to establish a model of financing risk management on land reserve, which will include 'establish warning mechanism', 'extend the financing channels', 'adopt quantitative managements' and 'improve and enhance internal controls'.