Top banks in China begin lending under $45 billion infrastructure plan

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What’s new: Two of China’s political lenders have set up new units to handle financing in Beijing’s newest city 300 billion yuan ($45 billion) infrastructure spending to bolster faltering economy.

China Development Bank (CDB), the country’s largest policy bank, has lent 1.3 billion yuan through a newly established infrastructure fund management company to finance a highway construction project in Shanxi and an airport project in Henan, the bank said on Friday with

The Agricultural Development Bank (ADB), the second-largest policy lender, also set up a new fund management company and issued a 500 million yuan loan for a hydroelectric power plant project in Chongqing, it said a day earlier.

Background: The State Council, China’s cabinet, in June outlined a plan to raise 300 billion yuan to fund infrastructure projects as part of its push to boost investment and boost employment in the second half of the year. According to the cabinet, the funds would serve as capital for large infrastructure projects or as bridging financing for projects financed by special-purpose bonds from the municipalities.

According to the central bank, banks should raise the funds through measures such as bond sales. The proceeds will be invested in projects such as transportation, energy, water conservancy, technology, underground pipelines and logistics, the central bank said.

Under the plan, CDB will raise 210 billion yuan and ADB 90 billion yuan. Sources said Caixin.

The 300 billion yuan stimulus measure is on top of one Increase of 800 billion yuan in the loan ratio for the country’s three political banks, including to support infrastructure investment, the State Council said on June 1.

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Quick Takes are condensed versions of China-related quick news stories for you to use.

Contact reporter Han Wei ([email protected]) and editor Bob Simison ([email protected])

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