Xi Jinping Enlists Financial Sectors Into War Against NCoV

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Xi Jinping Enlists Financial Sectors Into War Against Novel Corona Virus

SHANGHAI, China – Chinese President Xi Jinping drafts state-dominated financial sectors into the country’s war against the coronavirus outbreak, enlisting banks, brokerages, and fund managers to put in resources into troubled segments of the economy.

Lenders are stepping up to answer the call from the Chinese government and offer businesses virus-fighting loans at extremely low rates. Further, investment banks are sending aid to companies for faster anti-virus bond issuance. Mutual fund managers are also rushing away from selling stocks to dampen the ongoing panic in the market.

Joint efforts that started late last year to rein in the spreading virus in the central city of Wuhan underline the centralized power of the governing Communist Party in the state-owned companies dominated sector.

The campaign of the Chinese government has revived memories of its rescue efforts during the 2015 market crash. However, it has also deepened the ongoing fears over China’s corporate governance and the possible risks of troubles in the future.

On Thursday, the leisure company Wuhan DDMC Culture and Sports Company announced that they achieved the approval from the Shanghai Stock Exchange to ussie around 600 million yuan worth of bonds through a green channel that was specially created to help virus-hit companies.

Based on the statement at the company’s website, it is akin to receiving charcoal during the winter season, noting that the operations of the company were also affected by the epidemic.

Three more companies, the China Nanshan Development Group, Sichuan Kelun Pharmaceutical, and Zhuhai Huafa Group, have raised funds this week to help with the government’s efforts to battle the spreading virus. The three companies gained a combined total of around 2.1 billion yuan from issuing bonds through the interbank market.

From the statement from the companies, the proceeds they were able to come up with will be used for drug discovery efforts as well as hospital construction programs.

Furthermore, regulators have also enlisted lenders to provide cheap funds into areas stricken by the virus and not to remove loans from businesses suffering from the epidemic.

A Bank of China loan officer promised to give special treatment to companies defaulting due to the virus fallout. The officer further stated that the Chinese central bank is going to cap loan interest of firms with operations crucial to beating coronavirus, such as drug makers and mask manufacturers. He said that such companies would get the lowest possible rates for their loans.

Meanwhile, following the massive plunge of the equity market in the country on Monday, a flurry of support from the government-aided in stabilizing stocks.