In China, Xi Jinping’s ‘financial superpower’ ambitions spur local scramble for resources
- Some of China’s biggest provincial economies intend to expand and diversify financial resources this year, largely to fund economy-boosting construction projects
- But analysts say the rush to secure more financing at local levels could run counter Beijing’s de-risking campaign amid a property crisis and local-government debt woes
China’s economic powerhouses are vying for more financial resources to fuel their development, hoping to ride the tailwinds of President Xi Jinping’s intention to turn the country into a financial superpower.
Five of China’s top-10 provincial economies, including Guangdong, Jiangsu and Zhejiang, have touched on their visions for flexing their financial muscles.
The plans include introducing more financial institutions to fund local construction efforts while adding value to the broader financial ecosystem, such as through more diverse services and support, according to their official government documents.
For instance, authorities in east China’s Jiangsu vowed to facilitate the flow of capital into the real economy, which they say would help “resolve local debt risks and equally meet the reasonable financing needs of both state-owned and private real estate firms”.
The central province of Henan, known for its local iPhone assembly plants and as the country’s bread basket, is also looking to attract foreign financial institutions to provide additional financing for the local manufacturing industry.