China has mandated its lenders to boost coal and energy financing in a bid to address the power woes and secure supplies for the winter.
- The China Banking and Insurance Regulatory Commission has tasked local banks and other financial institutions to prioritize lending to qualified miners and power plants to assist them in growing thermal coal and electricity output.
- Banks were also ordered to allow loan extension or renewal for qualified producers and firms, not to cut loans for the said industries, and offer loans to metal and non-ferrous metal firms for production expansion.
- The Commission will guide banks and insurers to help miners and coal-producing areas boost their supply and will be given more leeway in non-performing loan levels for supposed industries.
- Policies should be in line with industry policies and regulations and not exceed national standards. Lenders should also monitor consumer lending and cannot offer rates higher than available in the market.
China has recorded power issues in the past month, driving the first factory output contraction since the COVID-19 pandemic hit.
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