Since last year, to cope with the challenge of the ongoing international financial crisis, Bank of China (BOC) has engaged in a series of policies and measures, amplified distribution of valid credit, reinforced their business structure, and upgraded their level of business to uphold the stable, yet swift development of the Chinese economy.
Implementing macroeconomic policies and enhancing credit distribution
After the state enacted a series of measures on expanding domestic demand and promoting economic growth in November 2008, BOC promptly held a special-topic conference. It took the lead in enacting 10 different measures to carry out macroeconomic policies of the central government and increase credit support on key sectors and industries to effectively satisfy the current demand of economic entities on financial services.
According to the orientation of the industrial policy of the state, BOC promptly specified key areas for credit support: the key infrastructure construction projects of the state, including railway, airport, highway, power grids, nuclear power and hydropower; increasing the support of urban infrastructure construction projects, including urban railways, road, water supplies, waste water and waste treatment as well as rural highway and power grid projects; increase credit support for housing projects for low-income urban residents; give priority to small and medium-sized enterprises (SMEs) , key customers of BOC; continue to offer credit support to export enterprises whose products retain a consistent level of demand from the overseas market; continue to support the globalization of resource-based enterprises and offer comprehensive financial services including global unified credit certification, syndicated loans, trade and financing, export credit, global cash management, investment banks, and insurance companies. BOC has optimized and adjusted the credit certification policies in a timely manner, and further enhanced the support on economic entities, in conjunction with industrial rejuvenation planning by the state on several occasions.
At the same time as they promptly issued corresponding measures and implemented the macroeconomic policies of the state, BOC expanded the size of yuan loans and accelerated the distribution of valid credit. By the end of 2008, the onshore corporate loans of BOC were above 250 billion yuan, more than that of 2007 and above 90 billion more than that of early 2008. Moreover, the net increase volume in November and December was 50 billion yuan.
In January, under the premise of watchful risk control, BOC continued to enhance their credit distribution efforts. By the end of January, the balance of their corporate loans was nearly 1.6 trillion yuan, an increase of 87.29 billion yuan, than that of the beginning of the year, with a single-month growth of 5.79%. The newly-distributed corporate loans further tilt in favor of "power, gas, and water," "communications and transport, warehousing, and postal," and "water conservancy, environment, and public facilities management." With this, the corporate financial business began with their best foot forward.
Stressing risk control while stabilizing quality of assets
While promoting rapid business development, BOC has remained compliant in its operation. It effectively controls risks and ensures consistent quality in its assets. Since late 2008, BOC’s newly-increased loans were mainly injected in such key areas as infrastructure construction projects, post-disaster reconstruction, corporate M&A, and independent innovation. Key sectors such as railway, highway, urban construction, power and resources, large resource-based enterprises, as well as key credit projects of domestic enterprises adopting globalization strategies and loan structure were also further optimized.
For enterprises encountering operational difficulty due to the impact of the financial crisis, BOC analyzes them individually and offers different treatment. For enterprises concerning the key basic energies and raw materials of the state, and those which enjoy healthy prospects despite the current difficulty, BOC offers vigorous support to help them navigate through these difficulties. For enterprises experiencing problems like poor management, long investment positions, reduced productivity rates, high energy consumption and high pollution, BOC will enhance its efforts on the recovery of non-performing loans and do its best to protect its assets.
