Funding measure offers few gains

Domestic media has reported that China's central bank may let qualified property developers issue medium-term notes on the interbank market, a sign that the government is trying to open funding channels to the real estate market, albeit in an indirect way.

This measure has the potential to alleviate the ongoing funding crunch in the industry by pumping money into the property market.

Of course, it also raises some questions. For example, will the influx of funds send housing prices soaring again, just when they are finally starting to drop? And wouldn't that nullify all the efforts that have been made to cool down the real estate market?

These concerns are reasonable, but not worth worrying about.

Providing some developers with an additional way to borrow money won't do much to nudge hesitant buyers off the sidelines.

As for the developers, it is unclear how much the measure will help. It is likely that the companies that will qualify to issue the notes already have better funding options available to them. The developers desperate for funding, however, may find it difficult to sell their corporate bonds.

In other words, the measure has limited potential at best. If anything, it serves as more of a symbolic act to shore up confidence in the housing market.