China’s top banks begin lending under $45 billion infrastructure plan
What’s new: Two of China’s political lenders set up new units to handle funding in the latest 300 billion yuan ($45 billion) in infrastructure spending to support the stellar economy.
The China Development Bank (CDB), the country’s largest political bank, has issued 1.3 billion yuan in loans through a new infrastructure fund management company to finance a construction project highway in Shanxi and an airport project in Henan, the bank announced on Friday.
The Agricultural Development Bank (ADB), the second largest political lender, has also set up a new fund management company and provided a 500 million yuan loan for a hydropower project in Chongqing, it said a day earlier. .
Background: The State Council, China’s cabinet, presented a plan in June to raise 300 billion yuan to finance infrastructure projects as part of its efforts to boost investment and increase employment in the second half of the year. of this year. The funds would serve as capital for large infrastructure projects or as bridge financing for projects financed by local government special purpose bonds, according to the firm.
Banks must raise funds through measures such as the sale of bonds, according to the central bank. The proceeds will be invested in projects such as transport, energy, water conservation, technology, underground pipelines and logistics, the central bank said.
Under this plan, the CBD will raise 210 billion yuan and the ADB 90 billion yuan, sources told Caixin.
The 300 billion yuan stimulus comes on top of a Increase of 800 billion yuan in the lending quota for the country’s three political banks, also to support infrastructure investment, the State Council said on June 1.
Five things to know about China’s banks’ latest $45 billion infrastructure stimulus package
Quick Takes are condensed versions of China-related stories for quick news that you can use.
To download our app to receive news alerts and read news on the go.
Obtain our free weekly Must-Read newsletter.