Exclusive | Key Chinese cities and provinces set to receive stimulus - on the quiet

The mainland government is quietly offering financial stimulus to key cities and provinces to help them maintain local economic growth.

This is in addition to Shanghai taking up a huge loan from a state-owned bank to set up the first Hong Kong-like free-trade zone on the mainland.

Government and banking industry sources familiar with the situation told the South China Morning Post that Agricultural Bank of China (Agbank), one of the big four state lenders, signed an agreement with the city government last week to provide loan credit worth 250 billion yuan (HK$314 billion) - equivalent to about 12.5 per cent of Shanghai's GDP for last year.

This year senior government officials have repeatedly insisted that Beijing will not launch any nationwide economic stimulus - as it did in 2008 - to ensure that the world's second-biggest economy will not see a significant slowdown. But the sources, who declined to be named due to the highly sensitive nature of the matter, said Beijing did not rule out the possibility of "unofficial economic stimulus" to help key economies like Shanghai boost their growth.

Other banks may quickly copy Agbank's loan plan for Shanghai and support other areas such as Guangdong province, where the export industry has been badly hit, the sources say.

Such a huge loan arrangement by one state-owned bank for a mainland city like Shanghai is considered rare.