China regulator asks financial institutions to support infrastructure
BEIJING: China’s banking and insurance regulator has asked financial institutions to give more support to infrastructure investment, importers and exporters, and creditworthy companies experiencing temporary problems.
In a statement posted on its website, the China Banking and Insurance Regulatory Commission ( CBIRC) also called on the institutions to raise the proportion of medium- and long-term loans to avoid placing strain on borrowers at the end of the month or quarter.
The move comes amid a period of uncertainty for China’s economy, in part because of an intensifying trade row with the US. China almost quadrupled the value of fixed- asset investment projects approved in July from the previous month as it looks to accelerate infrastructure spending.
On Saturday, the regulator called on banks and insurers to address “weak points” in China’s infrastructure sector and cooperate with local governments to identify their needs but be careful about raising their hidden debt levels.
It also said financial institutions should not “blindly” withdraw funding from companies that have a good credit record but that are experiencing “temporary operational difficulties,” without naming any such firms.
Support should also be given to foreign trade and export- oriented firms affected by the situation on the international market and going through problems but retain good development prospects, it added.
Growth in China’s exports and imports accelerated in July despite fresh US tariffs, while its trade surplus with the US remained near record highs.
Earlier this month, the regulator said it would guide financial institutions to expand financing, including to qualified private companies and small businesses. — Reuters