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Financial Credit Says No to Duplicated Construction
In order to promote the strategic adjustment of financial structure by making full use of credit leverage, a joint notice has recently been issued by the People's Bank of China and the State Economic Trade Commission, requiring that the restrictions or bans on loan-granting are to be imposed on those eliminated projects with backward productivity, technologies and products or those projects of duplicated construction.
The notice points out that the backward products and technology and blind duplication in construction has become a critical issue in China's economic development. It has not only severely contained the enhancement of economic growth quality and the improvement of industrial structure, but has also seriously affected the quality of banking credit assets. The commercial banks should strictly adhere to the requirement of national industrial policies, support the superior and limit the inferior in line with the directory for the elimination of backward productivity, technology and products and the directory of banning the duplicated construction in industrial investment. New loans for those projects to be eliminated must be suspended immediately and granted loans should be urged for recall. For those enterprises to be closed down within a time-limit recall of loans should be enforced to decrease the credit assets losses of banks; and for those to be rectified, loans incremented must be suspended.
The objects for elimination in the above-mentioned directories refer to those of backward productivity, technology and products in violation of the state laws or regulations, and those of backward mode in production, inferior product quality, serious environmental pollution and high consumption of material and energy. The objects for investment prohibition are those projects of duplicated construction at a low level which will entail surplus of current productive capacity that should be controlled in total amount, the projects with backward technology as already replaced by advanced, mature technology and the projects polluting environment and wasting resources.
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