China’s carbon-neutrality push prompts major coal-production region to beg banks for financing
- Local authorities in Shanxi province have stepped in to secure financial assistance for coal miners amid rising default risks
- There is growing anxiety that the reluctance of banks and lenders to inject such funding could pose a serious threat to local economic stability
China’s ambitious carbon-neutrality goals do not bode well for miners in the coal-producing province of Shanxi, which is already facing financing difficulties after a series of high-profile domestic bond defaults last year.
As a result, local authorities have stepped in to court financial assistance.
At a conference attended by representatives of 160 financial institutions on Wednesday, local state firms and financial authorities joined efforts to shore up confidence by promising a timely repayment of mature debt.
“[You] should actively underwrite or subscribe the bonds of provincial-government-owned coal miners to support the transformation towards high-quality development,” Chang Guohua, director of the Shanxi Financial Supervision and Administration Bureau, said in his appeal to more than 500 attendees, urging them not to withdraw or scale back their financing support.