China urges more banking support to self-reliant industries, supply chains
It’s been a bad year to be a big cheese in China. Billionaire entrepreneurs have been hounded. Over-extravagant entertainers have disappeared from the internet. Now a new type of tycoon is feeling the heat.
The latest regulatory crackdown on what the government considers private-sector misbehaviour extends to businessmen with excessively cosy ties to banks. The fear is that insider dealing, preferential access to credit and lax corporate governance pose threats to stability, particularly in the regional and local underbelly of China’s financial system.
This week, some Chinese banks have been told by financial regulators to issue more loans to property firms for project development, two banking sources with direct knowledge of the situation told Reuters on Monday, in efforts to marginally ease liquidity strains across the industry.
Chinese authorities have yet to publicly give any signal that they will relax the “three red lines” – financial requirements introduced by the central bank last year that developers must meet to get new bank loans.
China’s banking and insurance regulator said on Wednesday that lenders should step up support to advanced manufacturers, self-reliant industries and supply chains.
“Banks should resolutely cast away from the wrong idea of deviation from their main business… and excessive business expansion,” said the China Banking and Insurance Regulatory Commission (CBIRC) in an online statement.
Banks should step up their internal risk controls and amend management shortcomings to develop further, the CBIRC said.
