China’s National Administration of Financial Regulation has put forth an initiative to encourage banking and insurance institutions to increase credit in order to bolster the country’s sluggish consumption. In an effort to combat tepid economic growth, officials at the regulatory body have suggested that financial institutions offer greater support for big-ticket purchases, including new-energy vehicles and green home appliances.
The regulator acknowledges that Chinese residents are currently reluctant to spend, noting a weakness in the consumption of high-value items. As a result, they are urging the banking and insurance sectors to also provide assistance to companies within service industries such as accommodation, catering, wholesale and retail, as well as culture and tourism, transportation, and foreign trade.
In addition to this, the regulator plans to allocate more credit to various sectors. This includes basic infrastructure, the manufacturing sector, rural revitalization, major regional development projects, technology and innovation, and supply-chain upgrades.
China’s top leadership recently acknowledged the challenges faced by the economy and pledged further policy support to ensure the recovery remains on track.
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