China Development Bank loans point to stealthy economic stimulus

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CDB loans will go towards investment in Hebei, Jiangsu and Qinghai in a further indication of the stealthy economic stimulus on mainland

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More than 60 per cent of China Development Bank's bonds sold this year went to investors in Europe, the Middle East and Africa. Photo: EPA

George ChenandJane Caiin Beijing

Published: 12:00am, 15 Aug 2013Updated: 11:45am, 23 Jan 2018

China Development Bank (CDB) has agreed to fund massive infrastructure borrowing by three mainland provincial governments in the latest sign of an effort by Beijing to prop up growth with targeted bursts of lending.

CDB, a state-owned lender that reports directly to the State Council, China's cabinet, has signed memorandums of understanding (MOUs) separately with the Hebei , Jiangsu and Qinghai governments.

The bank will offer financial support for a variety of local projects, ranging from a new airport to public housing, a CDB source, who spoke on condition of anonymity, told the .

The reported on Monday that Agricultural Bank of China (Agbank), one of the big four state-owned lenders, signed an agreement with the Shanghai government last week to provide loan credit worth 250 billion yuan (HK$314 billion). That is equivalent to about 12.5 per cent of Shanghai's GDP for last year.

Agbank confirmed it would support Shanghai to build China's second Disneyland and pay for improvements needed to implement the city's much-heralded free trade zone.

The CDB source said the bank would lend Jiangsu money for improvements to its urban infrastructure and upgrade the regional transport network.

Remote and underdeveloped Qinghai in the northwest would get cash for road, railway and waterway construction projects.