Banking Regulators: Infrastructure Projects Need Financial Support

Source: China Securities Journal, ChinaScope Financial (Data)

+       Regulatory bodies recently urged commercial banks to extend greater financial support to the major construction projects: railways and roadways, agricultural infrastructure projects, and low-income housing projects.

+       LIAN Ping, Chief Economist at the Bank of Communications (BoCom), believes that commercial banks will increase lending to infrastructure projects continuously in the next few months, so that the offering of medium- and long-term loans will be on an uptrend.

+       As of June 30, 2012, the outstanding loans of China’s five major commercial banks (Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, and BoCom) to the transportation industry had reached CNY 33.36 billion, accounting for more than 10 percent of total outstanding loans.

The growth of loans extended to the transportation and construction sector has fallen for most banks over recent years. The acceleration of infrastructure project approvals is however expected to reverse the downward trend and lengthen the overall loan maturity.

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