China pulls out all the stops to engineer growth

Beijing

CHINA is stepping up support for the economy by ramping up spending and considering new measures to boost bank lending. For a start, the central bank issued a slew of measures on Tuesday to increase financial support to its struggling industrial sector, in the latest efforts to counter a prolonged economic slowdown.

The People's Bank of China (PBOC) will guide banks to boost lending to support industrial upgrading and maintain adequate liquidity for industrial structural adjustment, it said in a document jointly issued with seven other top ministries and regulators.

It would also step up the disposal of bad assets and slash lending to zombie firms while promoting mergers and acquisitions among firms, the central bank said. "The differentiated credit policy will ease market concerns about a sharp fall in credit caused by closure of excess production capacity," analysts at Minsheng Securities wrote in a note. The central bank would guide steady growth in credit and money supply and use various tools to maintain adequate liquidity, according to the document on its website. "We need to further enhance the service ability of t…