Xinhua News Agency, Beijing, November 27. With the approval of Premier Li Keqiang, the State Council recently issued the “Notice on Strengthening Capital Management of Fixed Asset Investment Projects” (hereinafter referred to as the “Notice”).
The “Notice” pointed out that the implementation of a capital system for fixed asset investment projects and the reasonable determination and timely adjustment of capital ratios are important policy tools to promote effective investment and prevent risks, and an important means to deepen reform of the investment and financing system and optimize the investment supply structure.
The “Notice” proposes four aspects of policy measures on strengthening the management of capital for investment projects. The main contents include clarifying the scope and nature of the capital system of investment projects.
In fact, the key point of this notice is to properly adjust the minimum capital ratio of infrastructure projects. It is mainly to reduce infrastructure projects in the areas of ports, coastal and inland navigation, highways (including government toll roads), railways, urban construction, logistics, ecological protection, and social livelihood. The minimum capital ratio of the projects can be adjusted from 25% to 20%.
Editor’s words: This notice shows that the credit business of the Chinese bank is difficult, and the business of the physical enterprise is down. The mass printed banknotes cannot be loaned out, but only to those infrastructure projects.
Source from People’s Daily (November 28, 2019 02 edition)