Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. REVELANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Hazloc Heaters
Copper Tip Energy Services
Hazloc Heaters
Copper Tip Energy

EnergyNow Showcase

China Orders Banks to Ramp Up Funding to Boost Coal Output


English Español 简体中文 हिन्दी Português
These translations are done via Google Translate
(Bloomberg) China ordered its banks to ramp up funding to coal and energy companies, another step in its efforts to ease a power crunch and ensure supplies this winter.

Banks and other financial institutions should prioritize lending to qualified mines and power plants so they can increase thermal coal and electricity output, China Banking and Insurance Regulatory Commission said in a statement Tuesday.

In order to maintain price stability, bank loans and financing are strictly banned from being used to speculate on commodities such as coal, steel and metals in the financial markets, the regulator said. It is also forbidden from being invested in related stocks, bonds and futures markets as it could be in violation of regulations, it said.

China has seen a widening power crunch since last month that has resulted in power rationing in most regions. The electricity shortage contributed to the first contraction in factory activity since the Covid pandemic began and prompted analysts from Goldman Sachs Group Inc. to Nomura to cut the country’s growth outlook.

China’s power shortage is partly due to slowing coal production, with some coal miners struggling to secure financing after China set goals to lower the use of coal in energy production. The recent surge in commodity prices have also raised Chinese officials concerns over domestic inflation and market stability.

The regulator also warned against investments in high-end consumer goods such as Moutai liquor and pu’er tea in the same statement, adding it’s to control “the disorderly expansion of capital,” without elaborating.

Other highlights from the statement:

  • Banks should accelerate and prioritize loan approvals to qualified coal miners and providers of coal power and winter heating
    • Qualified producers and companies will be allowed to have loans extended or renewed
    • Will guide banks and insurers to help coal miners and coal-producing regions increase supply
    • Banks will be given more allowance in non-performing loan levels for their support of these industries
    • Banks are not to cut loans to qualified coal mines and coal power plants
    • Banks are to provide loans to metal and non-ferrous metal firms; to be used for upgrading their capacity to greener production
  • Lending policies should strictly follow related industry policies and regulations, and not to go above national standards
  • Banks should properly monitor consumer lending; banks shouldn’t offer consumer credit product with rates notably higher than market rates


Share This:



More News Articles


New SHOWCASE Directory Companies

 

Becht
RAM Industries Inc.
Osperity
RHK Hydraulic Cylinder Services Inc.