China's housing minister, Ni Hong, has announced a significant policy shift indicating that the government is prepared to let some troubled property firms go bankrupt, emphasizing the need for bankruptcy and reorganization to be carried out in accordance with the principles of rule of law and market for real estate companies that are severely insolvent and lack operational capacity. This announcement comes as part of a broader crackdown on financial crimes, with top prosecutors intensifying efforts and making hundreds of arrests. Additionally, in a move that could impact the real estate sector, developers in Foshan, Guangdong province, are now permitted to sell new homes before fully repaying their development mortgages to banks. This series of actions sends a clear message to struggling property developers in China that they will face strict consequences.