Pan Gongsheng, deputy governor of the People’s Bank of China, said that COVID-19 outbreak has greater impact to its economy than originally expected. It is requiring additional policy support in terms of finance and credit.
The People’s Network reported on the 3rd that the deputy governor made the statement at a press conference in Beijing the previous day.
“There is still room for ordinary financial policies aimed at supporting economic aid in China,” said Pan Gongsheng. He explained that it is seeking new measures to support bank loans to small and medium-sized companies suffering from financial difficulties.
He said the new measures are not a large scale like quantitative easing. But rather a short-term policy adjustment.
People’s Bank of China resort to safe the economy after COVID-19
The People’s Bank of China announced on Thursday that it will start buying loans to small and medium-sized companies. It will also buy loans to private companies in the banking sector starting this week.
The bank plans to acquire loans from urban banks and local banks every quarter. By taking advantage of the special loan limit of 400 billion yuan.
Pan Gongsheng explained that such measure could provide interest-free funds to small and medium-sized banks. It could measure for up to 40 percent of their loans.
An official of the People’s Bank of China added that loans through the special loan system do not require collateral and guarantees. Instead, it targets loans to small and medium-sized enterprises worth a total of 7 trillion yuan..
China’s GDP fell 6.8 percent in the January-March period from a year earlier. It is due to the COVID-19 outbreak shock in the country. Quarterly statistics marked the first significant negative growth since 1992.
Also, Pan cautioned that the asset quality of domestic banks as it faces downward pressure would likely to affect Chinese economy.
According to the worldometers, the number of Coronavirus case in China now reaches 83.021 cases. Meanwhile, India overtook the greatest number of COVID-19 infection in Asia with 208,252 cases.
