In an effort to boost the faltering economy, Chinese authorities are considering a significant infusion of more than $140 billion into its sizable state-run banks, according to a report released on Thursday.
This week, Beijing unveiled some of the most aggressive steps in years to stimulate growth in the second-biggest economy in the world, which is still recovering from the plague.
A protracted debt crisis in the real estate industry, weak domestic consumption, and significant youth unemployment are some of the problems facing policymakers.
Large state-run banks may soon get as much as $142 billion in capital infusions from Beijing, according to a Bloomberg News article on Thursday that cited people with knowledge of the situation.
According to the newspaper, “new special sovereign bonds” will be the primary means of implementing the legislation; however, specifics are still pending.
It claimed that since the 2008 financial crisis, China has not made significant capital infusions of this kind into the nation’s leading banks.
Investors have applauded the plethora of measures unveiled this week, which include significant rate cuts and measures to promote home buying, as Shanghai and Hong Kong equities have rallied this week.
While officials continue to look for methods to meet this year’s stated growth target of five percent, analysts caution that additional fiscal stimulus is required to get the economy back up to full speed.
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