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Chinese government goes soft on financing local government for stable growth

Chinese government goes soft on financing local government for stable growth

Amidst slew of disappointing economic indicators with the GDP plummeting to 7.7% and the PMI indicators falling in April from March government on an afterthought is soft peddling credit availability at local government level to keep the investment and demand creation peddling along.

In a recent move China Banking Regulatory Commission has issued the newest financing platform risk management standards, which is about to exercise strict control over total lending volume with no new-added loan increase allowed.

A revised policy regarding platform loans shows the China Banking Regulatory Commission (CBRC) is taking a step back from its original plan and treating lending to local government financing platforms with greater leniency. Sweetening of the austerity drive by the financing sector is in a way relaxing of capital availability at grass root level to propagate equitable development.

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