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China offers $43bn boost to firms fighting virus
BEIJING, Feb 9, 2020 (BSS/AFP) – China’s central bank said Sunday it will
offer a 300 billion yuan ($43 billion) boost next week to help businesses
involved in fighting the virus epidemic which has swept China and infected
thousands.
The outbreak, which started in the central city of Wuhan, has brought large
swathes of the country to a halt and threatens to dampen the country’s
already slowing economy.
The People’s Bank of China (PBOC) said it will offer the first tranch of
special re-lending funds on Monday, which it said will support financial
institutions to give loans to key enterprises involved in the prevention and
control of the epidemic.
PBOC deputy governor Liu Guoqiang said that nine major national banks, as
well as local banks in 10 provinces and cities, qualify for the special
funding, according to a speech posted on the bank’s website Sunday.
These 10 areas include Hubei province — the epicentre of the virus
outbreak — as well as Zhejiang, Guangdong, the capital city of Beijing and
financial hub Shanghai.
The financial boost is aimed at helping companies at both national and
local level, Liu said.
He stressed that “financial institutions need to review and issue loans
quickly”, and that they should also release funds within two days.
The deputy governor added that the central bank will track the use of the
funds and any found to flout the rules will be penalised.
He also said the scope of key enterprises “should not be too wide”.
The deadly coronavirus has claimed over 800 lives in China and spread
around the world.
To curb the epidemic, cities in China have imposed travel restrictions and
urged citizens to stay home, and companies have delayed the resumption of
work — moves that could take a toll on earnings.
Analysts expect the outbreak to shave up to two percentage points from
China’s first-quarter growth, and authorities have announced a range of
measures to shore up support.
The central bank has called on financial institutions to avoid “blindly”
cutting off loans from industries, as well as small and micro enterprises.
It also announced that it would pump 1.2 trillion yuan ($173 bln) into
financial markets as it ramped up support for the virus fight.
BSS/AFP/SSS/1956 hrs