English

By Yin Lei

China is expected to channel more liquidity to domestic infrastructure projects, small and medium-sized businesses, and high-tech manufacturing players, according to a report by the China Securities Journal on Monday.

Shoring up the real economy has recently been a priority of the China Banking and Insurance Regulatory Commission (CBIRC), which is encouraging banks and insurance firms to step up financing support for related companies.

Such support was evidenced by the figures. In July, RMB 1.45 trillion of loans were granted at home, of which RMB 172.4 billion went to the domestic infrastructure projects, a monthly increase of RMB 46.9 billion, as shown by a recent update from the CBIRC. In the first seven months, banks granted a total of RMB 1.6 trillion in loans to small and medium-sized businesses.

The CBIRC also freed up credit supplies by adjusting its regulatory requirements on loan loss provisions, which in turn allowed banks to deal with non-performing loans. From January to June, a total of RMB 800 billion of such loans were properly handled, a year-on-year increase of RMB 166.5 billion.

More credits will be in the pipeline and specifically targeted at the real economy, experts believed.

Loans may reach an aggregate of RMB 16 trillion by the end of this year as infrastructure investments rise again in the second half, predicted Wang Jian, chief banking analyst with the Guosen Securities Co., Ltd.

In the remaining months of this year, small and medium-sized businesses, advanced manufacturing firms, infrastructure projects, and sectors undergoing industrial upgrading will receive even more financial support, said Xue Hongli, general manager of the financial market division at the Shanghai Pudong Development Bank.

The Agricultural Bank of China (ABC), one of China’s four major state-owned banks, already set out four fields in which it would promote inclusive finance. The focus of this bank will be centered on small and medium-sized enterprises that operate in the strategic and emerging sectors, boast new business models in the field of agriculture, advance green development, and stand as a model of scientific and technological innovation.