CHINA Financial sector's support to boost manufacturing delivers results in China: PBOC

CHINA

Financial sector's support to boost manufacturing delivers results in China: PBOC

CGTN

20:05, April 01, 2021

Welders work at a factory in Qingdao, Shandong Province, China, March 30, 2021. (Photo: CFP)

China's efforts to boost investment in its manufacturing sector has gained results by leveraging support from the financial sector, said the country's central bank, the People's Bank of China (PBOC), at a press conference on Thursday.

Investment increased in many sectors last year, but not in manufacturing, which posted a year-on-year decrease of 2.2 percent.

Zou Lan, head of PBOC's Financial Market Department, attributed the decrease to three major reasons: firms became less liquid due to external economic environment amid the pandemic; many manufacturing loans were used to deal with liquidity woes than investment; and investment capacity and confidence have yet to be fully restored.

Moreover, investments increased in high-tech manufacturing as the country makes adjustments to its industrial structure, but these industries accounted for a limited portion in the sector overall.

Furthermore, many manufacturers have been adopting a light assets approach. For example, they started leasing plant and equipment instead of buying them.

Meanwhile, there's a new trend of "shared manufacturing," which has changed the investment needs of manufacturing companies, he said.

In order to support the high-quality development of the manufacturing industry, in recent years, the PBOC has worked together with other financial departments to promote large-scale, medium- and long-term loans to the manufacturing industry, Zou said.

At the end of January 2021, the balance of long-term and medium-term loans in the manufacturing industry was 5.46 trillion yuan (about $830 billion), a year-on-year increase of 36.5 percent. It maintained positive growth for 15 consecutive months, reversing the previous slowdown in the growth rate of long-term and medium-term loans in the manufacturing industry.

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