BEIJING: China’s central bank issued a slew of measures on Tuesday to increase financial support to its struggling industrial sector, in the latest efforts to counter a prolonged economic slowdown.
The People’s Bank of China (PBOC) will guide banks to boost lending to support industrial upgrading and maintain adequate liquidity for industrial structural adjustment, it said in a document jointly issued with seven other top ministries and regulators.
It would also step up the disposal of bad assets and slash lending to zombie firms while promoting mergers and acquisitions among firms, the central bank said.
“The differentiated credit policy will ease market concerns about a sharp fall in credit caused by closure of excess production capacity,” analysts at Minsheng Securities wrote in a note.
The central bank would guide steady growth in credit and money supply and use various tools to maintain adequate liquidity, according to the document on its website.
“We need to further enhance the service ability of the financial sector to help industrial firms solve the problems of financing difficulties and high funding cost,” it said.
For competitive large-and medium-sized firms which have the ability to repay debt, banks can restructure their loan maturity to help them solve short-term funding shortages, it said.
Qualified manufacturers would be encouraged to raise funds via stock and bond issuance and use yuan in overseas trade and investment.
The central bank will also select a small number of qualified financial institutions to securitise bad assets.
