China orders coal and energy funding to ease power crisis, warns against Moutai and Puer tea investment
- Banks and other financial institutions should prioritise lending to qualified mines and power plants so they can increase thermal coal and electricity output
- The China Banking and Insurance Regulatory Commission also warned against investments in high-end consume goods such as Mou-tai liquor and Puer tea
China ordered its banks to ramp up funding to coal and energy companies, another step in its efforts to ease a power crunch and ensure supplies this winter.
Banks and other financial institutions should prioritise lending to qualified mines and power plants so they can increase thermal coal and electricity output, the China Banking and Insurance Regulatory Commission said in a statement Tuesday.
In order to maintain price stability, bank loans and financing are strictly banned from being used to speculate on commodities such as coal, steel and metals in the financial markets, the regulator said.
It is also forbidden from being invested in related stocks, bonds and futures markets as it could be in violation of regulations, it said.
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Chinese manufacturing thrown into disarray as country's electricity crisis rolls on
China’s power shortage is partly due to slowing coal production, with some coal miners struggling to secure financing after China set goals to lower the use of coal in energy production.
The recent surge in commodity prices has also raised Chinese officials concerns over domestic inflation and market stability.
The statement also said that banks should accelerate and prioritise loan approvals to qualified coal miners and providers of coal power and winter heating. Qualified producers and companies will also be allowed to have loans extended or renewed.