China’s banking and insurance regulator has asked banks and insurers to examine and tackle “weak points” in the country’s infrastructure sector.
According to Reuters, the China Banking and Insurance Regulatory Commission has called on the country’s financial institutions to give additional support to infrastructure investment, as well as importers and exporters.
In addition, the regulator wants to make sure that funding is not “blindly” withdrawn from creditworthy companies that are experiencing “temporary operational difficulties.”
Earlier this month, the regulator said it would give guidance to the nation’s institutions so that they will expand their financing offerings. With that in mind, the Commission also asked for a boost on medium- and long-term loans to prevent a strain on borrowers at the end of the month.
The move comes as some of U.S. President Donald Trump’s advisers are pushing the president to set tariffs as high as 25 percent on $200 billion of Chinese imports — a dramatic increase from the original proposal for 10 percent. The White House should make a final decision sometime in late August on the tariffs, which are expected to target consumer goods and food, as well as machinery components.
“Once you go down the road of using tariffs to disrupt the Chinese, you have to say 25 percent compared to 10 percent,” said Derek Scissors, a China expert at the American Enterprise Institute (AEI) who advises the administration on trade.
The U.S. has already imposed 25 percent tariffs on $34 billion worth of Chinese imports, and is set to levy similar tariffs on an additional $16 billion of goods.
While a final decision on the tariffs hasn’t been made, China is already feeling the strain. Recent data showed business activities in the country slowed in July, with growing signs of the slowing economic expansion, including declining investments in factories, “anemic” household consumption, and increasing defaults among corporations.