China asked its financial institutions to let credit play a bigger role in guiding and promoting industrial structure adjustment while preventing risks, according to a statement posted on the website of the People's Bank of China (PBOC), the central bank, Wednesday.
More financial supports should be given to the adjustment and rejuvenation of the country's key industries, and help curb overcapacity in some industries, said the statement, jointly issued by the PBOC, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission.
Companies and projects in industries facing overcapacity or not covered by the country's key industry support plans would be prohibited from raising funds through ways including issuing corporate bonds, convertible bonds and new shares, it said.
Since January, China has unveiled stimulus plans for 10 key sectors -- automobile, steel, shipbuilding, textiles, machinery, electronics and information technology, light industry, petrochemicals, nonferrous metals and logistics.
Financial institutions should support companies' technological reform and elimination of backward production capacity, the statement said, adding that any blind loan extension would be prohibited to companies or projects in industries plagued by serious overcapacity,
Credit supply to high energy-consuming, high polluting industries would be firmly restricted, it said.
The statement also told banks to enhance risk control by stepping up oversight on mid and long-term loans, and strengthening risk evaluation of government-backed projects, which had easy access to loans.
Lenders are required to improve information exchanges and risk alarming system as well as maintain adequate capital reserves to cope with potential risks.
The government will also increase the number of pilot cities carrying out yuan settlement in foreign trade from the current five -- Shanghai, Zhuhai, Guangzhou, Shenzhen and Dongguan, to help export companies avoid foreign exchange rate fluctuations.
