Relending and 'green channel' to spur backing for industrial stability

China is rolling out monetary and industrial support to ensure the smooth operation of its logistics system and to safeguard the stability of industrial and supply chains amid growing COVID-19 cases.

The People's Bank of China, the nation's central bank, decided at a meeting on Friday to use multiple monetary tools, including relending and rediscounting facilities, to encourage financial institutions to beef up support for the logistics system and supply chain stability.

A "green channel" will be set up to help transportation enterprises and freight drivers reasonably roll over their loans, the PBOC said in a statement on Friday.

Efforts will also be made to boost credit expansion in the civil air transportation industry, including establishing a mechanism to facilitate loan and debt financing and improving the functioning of the platform that makes use of companies' accounts receivable to boost their financing, the statement said.

The measures are in response to growing COVID-19 cases in China that are affecting logistics systems in areas such as the Yangtze River Delta region.

On Friday, the Ministry of Industry and Information Technology, the top industry regulator in China, said it will go flat out to implement precise epidemic prevention and control measures, ensure the smooth flow of logistics, and stabilize the industrial chain and supply chain.

Multiple measures will be taken to ensure both stable production at key enterprises and smooth operations of key industrial chains, including semiconductor, automobile, equipment manufacturing and biomedicine, the ministry said in a statement.

Efforts will be made to mobilize all the parties concerned to work together to implement the policies, and to continue ensuring the production and supply of medical goods, the MIIT said.

The COVID-19 situation is hurting vehicle production in China, with several carmakers and supplier plants standing idle in hard-hit cities. He Xiaopeng, CEO of Xpeng, a Chinese electric vehicle company, said in a post on a social networking platform that there is an urgent need to find a dynamic way to resume production in supply chain enterprises in Shanghai and neighboring areas.