China is preparing to inject tens of billions of U.S. dollars into eight government-owned banks and insurance companies to help strengthen the financial system and stimulate the slowing economy.
China's official Xinhua News Agency reported last Sunday (6 Sep) that the Chinese Ministry of Finance plans to inject 360 billion yuan (about 1.76 trillion baht) into eight state-owned banks and insurance companies to boost the sluggish economy.
The report stated that this move "will enhance operational stability, risk management capacity, and the ability to support the real economy more effectively."
This is the latest effort by Beijing to revive the world's second-largest economy amid multiple challenges, including trade tensions with Western countries, the impact of the Iran war, and an aging society.
The funding package will strengthen the financial position of three major commercial banks and five insurance companies, including the Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China, and China Export & Credit Insurance Corporation.
China’s Global Times government news outlet said the measure "will provide banks and financial institutions with more resources to lend to the real economy, while enhancing their resilience against external shocks during a time of global financial uncertainty."
President Xi Jinping has consistently emphasized that financial stability is a core pillar of China’s national security.
The announcement over the weekend comes as Beijing focuses on restructuring its economy to address several challenges, such as a shrinking labor force, a prolonged property sector crisis, and ongoing trade and technology competition with the U.S.
China’s economic growth slowed significantly between early April and the end of June due to weak domestic demand and the impact of the Iran conflict on oil prices, overshadowing the country’s previously strong export figures.
Official GDP figures released in July showed China's economy grew just 4.3% in the second quarter, below Beijing’s annual target and down from 5% growth in the first quarter.
Earlier in March, Beijing lowered its economic growth target to a range of 4.5%-5%, the lowest since 1991, with some analysts seeing this as an acknowledgment of existing economic weaknesses.
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Source:bbc