Government and Policy

China to continue financial support for Wenchuan

(Xinhua)
Updated: 2010-10-12 08:55

BEIJING - China on Monday vowed to continue its financial support to reconstruction projects in areas ravaged by the major Wenchuan earthquake in 2008, promising lower rates on loans and demanding an easier deposit reserve requirement ratio from banks in the regions.

The new pledge came in a joint statement on the website of the People's Bank of China, or the central bank, which announced the continued financial support along with the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission.

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Banks in the quake-hit areas should continue to provide financial support and services to reconstruction projects in the regions, as post-earthquake reconstruction is still in a critical period, the statement said.

The magnitude-8.0 quake, with its epicenter in Wenchuan in Southwest China's Sichuan province, left more than 87,000 people dead or missing and more than 374,640 injured. Millions of houses were also flattened during the major quake.

"We should keep the continuity and stability of our financial support to the regions and make our financial services better targeted and more effective," it said.

According to the statement, local banks in the quake-hit areas will continue to enjoy a lower deposit reserve requirement ratio, compared with elsewhere, until June 30, 2011, and such banks will also be exempt from any hike of the reserve requirement ratio during this period.

The statement ordered local bank branches in the quake-hit areas to provide prioritized financial services to projects in fields of infrastructure facilities, agriculture, medium and small enterprises, as well as ecological and environmental protection in the region.

China's central bank and banking, securities and insurance regulators encourage eligible companies in the quake-hit regions to widen their finance channels through inter-bank short-term bond issuances, bills and other financial instruments, according to the statement.

Also, local banks' preferential policies on loans to home reconstruction would remain unchanged in the quake-hit regions, it said.

However, loans to projects with high consumption of energy and heavy pollution must be strictly controlled in a bid to facilitate energy-savings and reduce carbon dioxide emissions in the region, according to the statement.

Chinese lenders had extended 172.4 billion yuan ($25.35 billion) loans for relief and reconstruction in regions devastated in the earthquake by the end of the first quarter, according to the central bank's figures released in May this year.

Outstanding loans at banks in quake-hit provinces, including Sichuan, Shaanxi and Gansu, surged 34 percent year-on-year to 2.29 trillion yuan at the end of March.