BEIJING (AP) _ China is to inject 270 billion yuan (dlrs 32.7 billion) into its state-owned commercial banks to make them more competitive internationally and resistant to risk, the state-run Xinhua News Agency reported.
The money will come from an issue of special Ministry of Finance bonds under a plan approved Saturday by the Standing Committee of the National People’s Congress, the Chinese legislature that opens its annual session next Thursday, Xinhua reported late Saturday.
The banks _ the Industrial and Commercial Bank of China, the Agriculture Bank of China, the China Construction Bank and the Bank of China _ will have a capital ratio of eight percent after the bond issue, in line with Chinese law and international agreements, it said.
The bond issue is part of government efforts to shore up China’s heavily indebted banking system and avoid the sort of financial turmoil that has swept other East Asian economies.
Describing the banks as a ``mainstay″ of China’s financial system, Xinhua said the bond issue was ``extremely significant″ because it would ``promote the smooth development of our country’s economy and society.″