China has announced plans to invest 300 billion yuan ($44 billion) in state-owned banks this year to protect against systemic risks and increase funding for technology companies.
These measures were outlined in the annual government work report presented at the opening of the National People’s Congress (NPC) session.
It states that Beijing will continue to replenish the capital of financial institutions and prudently dispose of non-performing assets in this sector. The authorities also plan to regulate competition between financial companies and promote consolidation among small and medium-sized local financial institutions.
The government announced the creation of an additional fund of 100 billion yuan to stimulate domestic demand through measures such as subsidizing interest rates on loans, financing guarantees, and risk compensation.
Beijing has also promised to continue to combat “risks arising in the real estate sector, local government debt, and small and medium-sized local financial institutions.”
According to Western media reports, the country’s authorities are likely to replenish the capital of the Industrial & Commercial Bank of China and the Agricultural Bank of China this year. They were not included in a similar program last year, when the capital of four other major banks was increased by $69 billion.
