Chinese Central Bank Offers 300 Billion in Funds to Key Enterprises Combatting Coronavirus via Re-lending Scheme

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The People’s Bank of China (PBOC) has launched a re-lending scheme that will provide a total of 300 billion yuan (approx. USD$42.95 billion) to help key enterprises to combat the impacts of the coronavirus.

PBOC commenced provision of its first batch of special re-loans on 10 February with the approval of China’s State Council.

PBOC deputy-governor Liu Guoqiang (刘国强) said that the re-lending scheme would provide funds to nine major nation-wide banks alongside key lenders in 10 provinces.

The nine nation-wide banks granted access to the scheme are comprised of China’s three policy banks and six big state-owned lenders, including,

  • China Development Bank,
  • The Export-Import Bank of China,
  • The Agricultural Development Bank of China,
  • ICBC,
  • The Agricultural Bank of China,
  • Bank of China,
  • China Construction Bank,
  • Bank of Communications,
  • Postal Savings Bank of China.

PBOC’s offices in a total of ten key provinces will each select up to three local legal person banks, with these locations including:

  • Hubei,
  • Zhejiang,
  • Guangdong,
  • Henan,
  • Hunan,
  • Anhui,
  • Chongqing,
  • Jiangxi,
  • Beijing,
  • Shanghai.

The re-lending funds will be directed towards a list of key enterprises that fall into two categories:

  • National key enterprises, the list of which will be confirmed by the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT), and
  • Local key industries, the list of which will be determined by province-level governments, for submission to the NDRC and MIIT for filing.

Liu said that the re-loan funds would be used for disease-prevention activities by key enterprises, and could not be used for regular operating purposes.

The term for the special re-loans is one year, and banks must provide funds at a preferential rate of 100 basis points below the most recently announced one-year loan prime rate (LPR), which currently stands at 3.15%.

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