FILE PHOTO: The Chinese national flag flies outside the Ministry of Foreign Affairs in Beijing on July 26, 2023. -China is considering to inject $142 billion into its large state-run banks, according to a report. Beijing has this week announced some of the strongest measures in years to boost activity in the world’s second-largest economy, which has yet to achieve a full recovery from the pandemic. Agence France-Presse
Chinese leaders are weighing a major injection of more than $140 billion into its large state-run banks in a move to support the flagging economy, a report said Thursday.
Beijing has this week announced some of the strongest measures in years to boost activity in the world’s second-largest economy, which has yet to achieve a full recovery from the pandemic.
Among the woes facing policymakers are a prolonged debt crisis in the property sector, sluggish domestic consumption, and high youth unemployment.
Beijing is now considering injecting as much 1 trillion yuan ($142 billion) of capital into large state-run banks, Bloomberg News reported Thursday citing sources familiar with the matter.
READ: China unveils fresh stimulus to boost ailing economy
The measure will be implemented mainly through the issuance of “new special sovereign bonds”, the report said, adding that the details have not yet been finalized.
China has not made major capital injections of this kind into the country’s top banks since the 2008 financial crisis, it said.
The slew of moves announced this week, which include key rate cuts and policies intended to encourage home purchases, have been welcomed by investors as stocks in Shanghai and Hong Kong rally this week.
But analysts warn that more fiscal stimulus is needed to get the economy back up to full speed, as leaders continue to seek ways to achieve this year’s official growth target of five percent.