46 billion euros for the economy - Beijing strengthens state-owned banks and insurers
China is undertaking a major intervention in its financial system, advancing a package of 360 billion yuan, about 46.1 billion euros, to strengthen banks and state-owned insurance companies, as the economy faces slowing growth.
The bulk of the package, around 37.2 billion euros, will go to state-owned banks, with the aim of maintaining their lending capacity and supporting economic activity.
The Agricultural Bank of China is expected to receive up to 20.5 billion euros, while the Industrial and Commercial Bank of China is expected to receive up to 12.8 billion euros. The Chinese Ministry of Finance will also be among the investors.
Also part of the package are the China National Tobacco Corporation and the Export-Import Bank of China, which will benefit from around 3.85 billion euros.
Meanwhile, around 9 billion euros will be injected into the insurance sector. China Life Insurance Group will receive around 4.5 billion euros, while China Taiping Insurance Group will receive around 900 million euros.
The insurance sector has faced strong pressures due to low interest rates, which have reduced investment returns. At the same time, Chinese authorities have urged insurance companies to increase investment in the domestic stock market.
The intervention comes at a time when Beijing is trying to support the economy and maintain the stability of the financial system.
The financial intervention is not Beijing's only significant move this month. The Chinese president is expected to visit Washington on September 24 and, according to reports, could be accompanied by a large delegation of Chinese company executives.
Such a move would be unusual for Xi, who rarely travels with heads of private companies. The last visit with a similar business delegation to the US dates back to 2015.
Meanwhile, the Chinese yuan has strengthened significantly against the dollar, reaching its highest level since January 2023. The currency's strengthening comes just weeks ahead of expected talks in Washington.
By injecting billions of euros into the financial system and preparing for a major visit to the US, Beijing is trying to combine supporting the domestic economy with strengthening China's financial and diplomatic position.
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