What Are the Policy Banks China Uses to Spur Economy?
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China’s specialized policy banks were designed to help the government achieve its long-term goals in areas where profit-driven banks might be reluctant to lend. Beijing can also draw on them when there’s a pressing short-term need to boost the economy. This year, as China tries to pull itself out of a Covid-induced economic weak patch, the government is calling on them for “national service” yet again.
They are the China Development Bank, The Export-Import Bank of China and Agricultural Development Bank of China. The three were set up in 1994 to provide targeted loans to areas seen by authorities as needing help. Each is state-funded and under the direct leadership of the nation’s cabinet. Their main areas of lending are:
• CDB: Infrastructure, urbanization, industry upgrade and equipment manufacturing, poverty relief and development
• Eximbank: Foreign trade and cross-border…