Bank hopes yuan fund will boost securities market and stimulate private sector
The Asian Development Bank plans to raise 1 billion yuan in bonds to stimulate private-sector growth in China, ADB officials said yesterday.
Bank officials are still discussing details with the Ministry of Finance, and the bond issue - pending approval by the ministry - could take place as early as the end of this year or beginning next year. 'This would be a first time for the ADB in issuing yuan-denominated bonds in China,' said Bruce Murray, ADB's chief representative in Beijing.
'It also would be the first for any multilateral organisation in China. The idea is to not only foster private-sector growth, but also to develop the bond market in China.'
China's bustling private enterprises, which economists estimate make up anywhere between one-third to a half of the economy, still have a difficult time competing against state firms, especially in getting access to bank loans.
The ADB, which has been working with the government to come up with laws to protect private enterprises, plans to lend the proceeds to domestic or foreign private investors. The money could be used for various projects, including building infrastructure and setting up factories.
The ADB already has a US dollar portfolio of private-sector loans and equity exceeding US$230 million in China. Most of the money has been ploughed into provincial banks and power-generating companies with private shareholders.