App | 中文 |
HOME >> STATE COUNCIL >> MINISTRIES

China unveils guideline on steel, coal industry lending

Updated: Dec 16,2016 8:04 PM     Xinhua

BEIJING - Chinese authorities have ordered banks and financial institutions to adopt a differentiated lending approach to companies in the country’s steel and coal industries.

Lenders should ensure loans to competitive companies but halt loans to loss-making enterprises, according to a guideline jointly released by two central government departments and the China Banking Regulatory Commission.

The guideline encourages lending to companies affected by mergers or reorganization in the steel and coal sectors.

Those companies with new capacity in steel or coal are strictly prohibited from receiving loans, and no financial support will be granted to “zombie companies,” which are economically inviable businesses.

Banks and financial institutions should help deal with corporate debts and non-performing assets through debt restructuring and bankruptcy liquidation to maintain financial order, the guideline said.

China has introduced a slew of policies this year to tackle overcapacity in the steel and coal industries.

In February, the government announced that steel capacity should be cut by between 100 and 150 million tonnes by 2020, 45 million tonnes of which should be achieved in 2016.

Coal capacity reduction is set at half a billion tonnes over the next few years, with 250 million tonnes expected for 2016.

In late November, the State Council announced that both targets for the year had been achieved ahead of schedule.

VIDEOS