China injects 66 billion euros in banks: Focus on lending!

China injects 66 billion euros in banks: Focus on lending!

China faces economic challenges and has decided to support the country's four largest state banks with capital increases of up to 66 billion euros. According to OE24 track the Bank of China, Bank of Communications and the Postal Savings Bank of China this measure to to strengthen hard core capital and promote lending. In view of a departing economic growth and a crisis in the real estate sector, the annual profits of these banks are stagnating, which underlines the need for such interventions.

The Ministry of Finance is involved as a major shareholder in the capital increases, which means that the banks are able to issue new stocks through private placements outside of the stock market trade. This is a step to improve the balance of balance sheet and to boost lending, which is of crucial importance for the government, since it strives for around five percent for the current year.

background of the capital increases

The capital increases are carried out against the background of stagnating economic growth and the uncertainties from international trade and possible key interest rates. Analysts emphasize the urgency to quickly equip the big banks with capital in order to reduce the pressure on profits and to secure the financial stability in the country.

The individual distribution of the capital increases looks as follows:

China's economic model

The economic environment in China is complex and is shaped by various internal and external factors. Since the 1980s, the Communist Party has controlled an unprecedented economic upswing, such as BPB The mixture of marketing and state control has led to an capitalistically dominated model, which is increasingly under pressure.

In recent years, China's international relations have deteriorated, which has led to a trade conflict with the United States. These tensions affect the Chinese economy and drive the government to find new ways to increase technological competitiveness and autonomous development. The efforts of China not to fall into the "trap of the middle income" are also decisive for the long -term stability of the country.

In view of the economic uncertainties and the challenges that arise from increasing wages and production costs, the government reacts with intensive regulatory measures and calls on companies to upgrading technological and better qualifications.