The Chinese government plans to provide approximately 80 trillion won to state-owned banks in the first half of this year.
Amid predictions that the U.S. trade and commerce policies of President Donald Trump will impact the Chinese economy, the Chinese government is expected to inject substantial funds to accelerate economic stimulus.
Bloomberg reported on the 26th that Chinese authorities plan to support three of the six major state-owned banks, including Agricultural Bank, Bank of Communications, and Postal Savings Bank, with 400 billion yuan (approximately 80 trillion won) by the end of June, citing sources. The funds will be raised through the issuance of special Government Bonds, and the support scale for each bank is under adjustment.
Bloomberg explained that this is the first time the Chinese government has injected funds into state-owned banks since the global financial crisis in 2008. Chinese banks are struggling due to reduced revenue from interest rate cuts and bad loans stemming from years of ongoing real estate crises.
China, which has been experiencing economic recession since COVID-19, is expected to inject up to 1 trillion yuan (approximately 200 trillion won) into major banks as part of a large-scale economic stimulus package, including this measure.
Reuters also reported, citing multiple sources at the end of last year, that Chinese authorities decided to issue special Government Bonds worth 3 trillion yuan (approximately 592 trillion won).
Domestically and internationally, there are expectations that detailed economic stimulus measures to promote domestic consumption will be presented at China's largest political event, the Two Sessions (Lianghui, National People's Congress and Chinese People's Political Consultative Conference), which opens on the 4th of next month.