SHANGHAI (Reuters) – China Construction Bank (CCB) has announced plans to set up a 30 billion yuan ($4 billion) fund to finance rental housing, China’s latest state-backed effort to help the real estate sector in trouble.

The public lender, which will provide money to the fund, plans to invest in real estate projects and turn them into affordable rental housing, CCB said in a statement Friday evening.

Beijing has stepped up efforts to help a real estate sector hit by mounting debt, mortgage boycotts and sluggish sales. Real estate and related sectors such as construction make up more than a quarter of China’s economy.

Authorities have allowed affordable rental housing to be listed in the form of real estate investment trusts (REITs), opening up a new funding channel for the company.

Reuters reported in July that China plans to launch a property fund to help property developers deal with a crippling debt crisis. The fund would initially be set at 80 billion yuan with support from China’s central bank, with the CCB contributing 50 billion yuan, a source said.

Political banks and local governments in China have also set up funds to help cash-strapped developers complete construction of pre-sold properties as homebuyer protests spread.

(Reporting by Jason Xue and Brenda Goh; Editing by William Mallard)

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