A flagship Beijing lending programme to revive the country’s debt-stricken property market has done barely any business almost a year after its launch, officials said, highlighting the difficulty for policymakers seeking to boost confidence in the world’s second-largest economy.The People’s Bank of China in November announced a Rmb200bn ($27bn) facility to provide interest-free loans to six state-owned commercial banks to finance thousands of stalled property projects across the country.

But almost a year after the programme was launched, less than 1 per cent of the funds have been disbursed to banks, which were supposed to match the PBoC loans with their own lending but have been unwilling to issue further debt to the ailing sector, according to former PBoC and current banking officials familiar with the situation.

“For Chinese banks, the downside of lending to distressed property projects far outweighs the upside,” said Larry Hu, chief China economist at Macquarie.