China’s central bank called on the biggest state banks for increased lending to support the world’s second-largest economy, which has suffered renewed weakness from COVID-19 lockdowns earlier this year.
At a meeting chaired by the central bank governor Yi Gang, the People’s Bank of China on Monday asked state-owned banks to take the lead in stabilizing the Chinese economy and step up credit to small business, green industries and the tech innovation sector.
The central bank also asked the lenders to guarantee “reasonable financing demand” for China’s property market. The PBOC cut benchmark interest rates on Monday, partly to prevent the real-estate market from sliding further.
The PBOC also asked policy banks to step up support to infrastructure projects, including internet infrastructure, city and rural infrastructure and national security projects.
China’s new credit was weaker than market expectations in July due to softening domestic demand, which economists believe could further drag on economic growth.