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China encourages lending to expand steel exports

Add Time:2016-04-26 01:33:00 Clicks:

Reuters reported that government regulators told Chinese banks on Thursday to finance steel exports to help reduce a supply glut in the domestic market. According to the order by the central bank and securities, banking and insurance regulators, Chinese bank support for steel and coal companies can include syndicated loans, export credit and project financing

Thursday's statement said the government would speed up the handling of non-performing loans in the debt-ridden sectors, and extend direct financing to support their restructuring. It would also work to deal with possible default risks in the two sectors. Banks would use a wide range of methods, including debt restructuring and bankruptcy settlements, to handle the problem, it said.

The order did not provide financial targets but said financing might be extended for shifting operations abroad.

The latest order to finance exports is part of instructions from the Chinese central bank and financial regulators to lenders to support the overhaul of state-owned steel and coal industries.

It was unclear whether this signals government encouragement for more coal and steel exports from China, which has been widely blamed for dumping its excess steel on world markets, depressing prices and threatening thousands of jobs. Beijing says it has done what it can on overcapacity, and the criticism is "lazy protectionism.
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