What’s new: Two of China’s policy lenders set up new units to handle financing in Beijing’s latest 300 billion yuan ($45 billion) round of infrastructure spending to bolster the staggering economy.
China Development Bank (CDB), the country’s largest policy bank, issued 1.3 billion yuan of loans 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 Friday.
Agricultural Development Bank (ADB), the second-largest policy lender, also created a new fund management company and issued a 500 million yuan loan for a hydropower station project in Chongqing, it said a day earlier.
Background: The State Council, China’s cabinet, outlined a plan in June to raise 300 billion yuan to finance infrastructure projects as part of its push to drive investment and increase employment in the second half of this year. The funds would serve as capital for major infrastructure projects or as bridge financing for projects funded by local governments’ special-purpose bonds, according to the cabinet.
Banks are to raise the funds through measures such as bond sales, according to the central bank. The proceeds will be invested in projects including transportation, energy, water conservancy, technology, underground pipelines and logistics, the central bank said.
Under the plan, the CDB will raise 210 billion yuan and the ADB 90 billion yuan, sources told Caixin.
The 300 billion yuan stimulus measure is on top of an 800 billion yuan increase in lending quota for the country’s three policy banks, also to support infrastructure investment, the State Council said June 1.
Quick Takes are condensed versions of China-related stories for fast news you can use.
Contact reporter Han Wei (firstname.lastname@example.org) and editor Bob Simison (email@example.com)
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