Banks told to support local govts credit demand

The headquarters of some Chinese commercial lenders have told their branches at the provincial level to support the credit demand of local governments' financing vehicles, the China Securities Journal reported on July 31.

The newspaper said, citing anonymous sources, that the focus of the credit backup would be put on projects involving highways, railways, natural gas and clean energy.

"Some ministries have suggested that banks increase their support to qualified projects made by local governments through financing vehicles, to prevent the projects from being halted due to lack of money," it said.

Shang Fulin, chairman of the China Banking Regulatory Commission, urged banks to strengthen their support to the real economy in the second half of the year by guaranteeing credit demand for the construction of agricultural facilities and affordable houses.

The CBRC is preparing to relax regulations on bank lending to local government's financial vehicles and the property sector, two areas that the CBRC has called very "risky" since 2010.