Banks to support local govt financing

Chinese commercial banks will provide credit support for the country's local financing vehicles to secure growth, a Chinese newspaper reported Tuesday.

Bank loans will mostly go to highway and railway construction, natural gas and clean energy projects, as well as other projects related to people's well-being, the Beijing-based China Securities Journal (CSJ) reported.

An earlier report from CSJ revealed that some of China's local government investment platforms are facing rising pressure to pay their debts this year, and bankers have suggested "a certain degree of" loosening credit support on provincial-level projects or key projects to prevent such projects from going unfinished.

Shang Fulin, chairman of the China Banking Regulatory Commission, has also pledged more effective support for development in the real economy in the second half of this year, including more credit support for agricultural production, infrastructure and public housing.

China's new yuan-denominated lending in June rose 285.9 billion yuan (about $45 billion) year on year to 919.8 billion yuan, according to the People's Bank of China, the central bank.

By the end of 2010, China's local government debts amounted to 10.7 trillion yuan.