Farms sector to get 50b yuan boostNatallie Cai
Monday, November 07, 2011
China's Ministry of Finance will provide funding facilities to encourage mainland banks to extend more than
50 billion yuan (HK$61.2 billion) in loans to the agricultural sector next year, official mainland media reported.
The finance ministry will earmark 3.6 billion yuan, of which more than 60 percent- or 2.4 billion yuan - will be used to cover interest on loans, the official People's Daily quoted Wang Jianguo, general director of National Agricultural Comprehensive Development Office under the ministry, as saying.
The remainder of the funds will be granted as subsidies to update agricultural projects, Wang added.
According to the daily, the ministry has formed a partnership with the
Agricultural Bank of China (1288) and Agricultural Development Bank of China to implement the proposed scheme.
Hu Yu, a Shenzhen-based analyst with Chinalion Securities, said lending to the agricultural sector would not be risky, compared with providing credit to offshore wind power and solar energy sectors where there is overcapacity.
Hu added there is room for development in the agricultural industry. James Liu, a Hong Kong-based analyst at CIMB-GK Securities Research, said the proposal would be a part of initiatives to further stimulate domestic demand as economic growth slows.
China's gross domestic product growth eased to 9.1 percent in the third quarter, year-on-year, from 9.5 percent in the second quarter and 9.7 percent in the first three months.
"This might be the beginning of policy stimulus and further support for the consumption sector may be on the cards," Liu said.
Overall monetary policy in the mainland remains tight as Beijing makes strenuous efforts to keep inflation in check.
http://www.thestandard.com.hk/news_deta ... 11107&fc=1
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