Beijing has ordered commercial banks to increase funding for coal and energy businesses to ease the power shortage crisis and secure supplies next winter.
In a new statement, China’s Banking and Insurance Regulatory Commission called on banks and financial institutions to give priority to qualified mining companies and power plants.
The purpose of the new directive is to help businesses increase thermal coal production as well as boost electricity production to alleviate the current energy crisis and prepare commodity supplies for the coming winter.
In order to stabilize prices in the market, financial institutions are also prohibited from lending capital for speculative purposes in certain commodities such as coal, steel and metals, the China Banking and Insurance Regulatory Commission stressed. strong.
The commission also prohibits borrowers from investing in stocks, bonds and the futures markets of certain commodities because it could violate Chinese government regulations.
According to Bloomberg, China’s power shortage is partly due to a slowdown in coal production, with some coal miners struggling to secure financial resources after Beijing set a target to reduce the share of coal in the system. general energy structure.
In addition, the hot increase in coal price is also another reason. Chinese government officials are very concerned about inflation as well as the stability of the domestic market.
In a recent statement, China’s Banking and Insurance Regulatory Commission also warned people not to invest in high-end consumer goods such as Maotai wine and Pu-erh tea. However, the committee did not elaborate on this point.
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