China to inject 360bn yuan into state banks and insurers

China is directing 360bn yuan ($53.6bn) into eight state-owned banks and insurance companies. The announcement was made by state news agency Xinhua on Sunday.

The package covers three large lenders and five insurers, including the Industrial and Commercial Bank of China, the Agricultural Bank of China and China Export & Credit Insurance Corporation.

Capital for banks and insurers

Xinhua said the funding is intended to strengthen the institutions’ operating resilience, risk resistance and capacity to support the real economy. State newspaper Global Times said the money would give financial institutions more room to extend credit and withstand external shocks.

The move is part of Beijing’s efforts to respond to trade and technology tensions with the US, a years-long property downturn and a shrinking workforce. The source also cited the effects of the Iran war and an ageing population among the pressures facing the economy.

Growth falls below target

Official figures released in July showed China’s GDP grew 4.3% in the second quarter, down from 5% in the first three months of the year. Weak domestic demand and the Iran war’s effect on oil prices were reported to have offset strong exports.

In March, Beijing set an annual growth target of 4.5%-5%, its lowest expansion goal since 1991. President Xi Jinping has long treated financial stability as a national security priority.