CDB recently relent 260 million RMB in PBOC’s special loans to Neusoft Medical to help it accelerate development and production of medical diagnostic and treatment equipment, relent 200 million RMB in PBOC’s special loans to Junlebao Dairy to support its supply of dairy products to Hubei Province, Beijing, and other epidemic-stricken areas, granted Eversun Holding Group 43 million RMB in special loans for operations resumption to drive the development of private businesses, and granted a total of 4 billion RMB in one-time long-term loans to four highway projects, including the Pingliang-Tianshui Highway and the Wudu-Jiuzhaigou Highway, in an effort to help highway extension projects in Gansu Province resume construction in a safe and orderly manner. Together, these loans have formed a powerful engine for promoting the prevention and control of the COVID-19 epidemic, and for accelerating the recovery of economic and social development. “They say that spring rain is as valuable as oil. CDB’s funding truly is the ‘timely rain’ we need in order to get back on track,” said one company manager.
Since the outbreak of the COVID-19 epidemic, keeping in mind General Secretary Xi Jinping’s important speeches and instructions, as well as the decisions and arrangements of the CPC Central Committee and the State Council, CDB has been fully supporting the role of development finance in counter-cyclical adjustment to help epidemic-affected enterprises resume operations and thus accelerate the recovery of economic and social development. As of March 6, 2020, CDB had granted more than 148.1 billion RMB in special liquidity loans for enterprises to resume operations, which included both RMB and foreign currency loans and were provided with preferential rates. These loans perfectly demonstrate how development finance can bring solutions to the challenges faced by the real economy.
Sparing No Effort to Support Key Construction Projects
As stressed by General Secretary Xi Jinping, vigorous efforts should be made to expand domestic demand, accelerate the progress of ongoing and newly launched projects, and strengthen safeguards for the supply of labor, land, funds, and other types of input. CDB has recently stepped up interaction with local governments and enterprises to provide strong financial support for ongoing and newly launched projects. It has set up a “green channel” for key projects newly approved by or registered with local governments or competent authorities, providing a more efficient loan approval process so that these projects can be launched as soon as possible and the impact of the epidemic can be offset.
With a total length of 306.73 kilometers, the Fuling-Xiushan section of the second line of the Chongqing-Huaihua Railway is a major project in China’s medium and long-term railway network construction plan, and is also a key project for promoting poverty alleviation in poverty-stricken areas including Pengshui County and Youyang County. However, the outbreak of the COVID-19 epidemic caused a significant decrease in railway traffic and thus in the income of the project constructor Chongqing-Fuling Railway Co., Ltd. Faced with high operational and construction expenses, it fell into a predicament due to a lack of funds. Knowing this, CDB Chongqing Branch immediately granted 55 million RMB in special loans to the constructor to resume and accelerate the construction of the project.
Recently, four new electric trains were deployed to Chengdu Metro Line 6 (Phase 1, 2 and 3) and Line 8 (Phase 1) and train systems testing was officially launched. These moves represented concrete steps towards the goal of putting the two lines into operation in 2020. At the end of this February, construction work on several Chengdu Metro projects was fully resumed, which brought about a huge and urgent need for funding. To help improve Chengdu’s public transit system and satisfy local people’s needs for convenient mobility, CDB Sichuan Branch arranged 1.5 billion RMB in medium and long-term loans to support the ongoing construction of Chengdu Metro Lines 6, 8, 10, and 11. It contacted the Chengdu Rail Transit Group, which had been affected by the epidemic, about its funding needs and completed within three days the review, approval, contract signing, and delivery of a 600 million RMB special loan. It also worked with commercial banks to help the group raise 1 billion RMB in medium-term notes, which ensured sound operation of the Chengdu Metro during the epidemic.
Recently, CDB Jiangsu Branch signed a loan agreement with Nanjing Pukou Railway Station Historical Street Protection and Development Co., Ltd. and delivered the first batch of 2 billion RMB in loans under the agreement, in order to ensure successful launch of the Yangtze River Protection Project of Jiangbei New Area (Pukou Railway Station Section) with a total investment of more than 12 billion RMB. The project mainly deals with environmental improvement along the riverbank, as well as the building of a fintech innovation park and a Yangtze River historical and cultural park. Once completed, the project will contribute to sustainable development of Jiangbei New Area, which is the only national-level new area in Jiangsu Province, and to environmental protection along the riverbank of Yangtze River’s Nanjing section.
Safeguarding Healthy Development of the Manufacturing Industry
The epidemic has had a significant impact on the manufacturing industry. According to data from the National Bureau of Statistics, China’s Purchasing Managers’ Index (PMI) reached 35.7% in February 2020, down 14.3 percentage points from the previous month. Maintaining healthy development of the manufacturing industry is necessary to stabilizing employment and the economy. Therefore, as a development finance institution, CDB has tapped into the advantages of medium and long-term investment and financing in order to support projects from the advanced manufacturing industry, strategic emerging industries, and the high-tech industry and to help key enterprises resume operations.
As a key enterprise in China’s equipment manufacturing industry, Shaanxi Blower (Group) Co., Ltd. owns many core technologies and holds a leading position in the global market. Its number of orders in 2019 reached a new record high and its employees were all prepared for a good start in 2020. But the unexpected epidemic disrupted its production and business operations. Its burden of collecting receivables was suddenly increased, which brought about an urgent need for low-cost funds. Knowing this, CDB Shaanxi Branch immediately opened a “green channel” for the group, through which the review, approval, contract signing, and delivery of a 300 million RMB special loan were completed within 24 hours. “In these times of hardship, we truly learned to appreciate CDB’s heartfelt aspiration to join hands with the business sector and help us overcome the impact of the epidemic,” said Li Hongan, Chairman of Shaanxi Blower (Group) Co., Ltd.
Inspur Group’s high-end equipment manufacturing plant in Jinan is China’s first plant for smart and flexible production of servers and has been recognized as a model for smart manufacturing plants worldwide. After the outbreak of the epidemic had passed, the plant was immediately put back into operation to produce digital products including servers for the purpose of epidemic prevention and control. Knowing that Inspur Group needed emergency funds to purchase raw materials from foreign suppliers, CDB Shandong Branch immediately opened a “green channel” for the group, through which a 100 million USD special loan was promised within 48 hours and was delivered in full within 72 hours, providing strong support for the use of big data in epidemic prevention and control.
The 12-inch 19-nm memory wafer fabrication plant project undertaken by Ruili Integrated Circuit Co., Ltd. represents the biggest industrial investment in Anhui Province. Because of the epidemic, the plant encountered difficulties in resuming production. After learning about Ruili’s funding needs, CDB Anhui Branch completed the credit granting process for a 1.5 billion RMB special loan, from review to approval and to delivery in full, within 24 hours. The loan has helped Ruili get production and operations back on track.
It is reported that CDB will soon set up special loans for manufacturing enterprises, with a view to providing targeted support for epidemic-affected enterprises in resuming operations and achieving sustainable development.
Making All-out Efforts to Safeguard Living Standards
As noted by General Secretary Xi Jinping, special attention should be placed on safeguarding and improving people’s living standards, particularly during the epidemic. With a focus on grain, oil, energy, and other necessities of everyday life, CDB has been providing efficient and excellent financial services to safeguard living standards in every corner of China.
As a major gas supplier in Rongcheng County, Xiong’an New Area, Rongcheng ENN Gas Co., Ltd. plays an important role in safeguarding local living standards and helping enterprises based in the new area resume operations. Knowing that the company lacked working capital due to the epidemic, CDB Xiong’an Branch immediately organized a work group to respond to the company’s funding needs, who worked overtime to collect relevant information, conduct due diligence, and go through the credit-granting approval process. On February 27, 2020, the branch delivered the first batch of 30 million RMB in special loans to the gas supplier, helping to ensure adequate gas supply to local enterprises and residents during the epidemic.
A stable supply of daily necessities is crucial to eliminating anxiety due to the epidemic. In the Xinjiang Uyghur Autonomous Region, Xinjiang Grain and Oil Refco Group Ltd. has been given the important task of supplying daily necessities to local communities. After the outbreak of COVID-19, CDB Xinjiang Branch granted a 120 million RMB special loan in a timely manner to help the group fight the impact of the epidemic and guarantee local living standards. “The timely loan from CDB has satisfied our need for the funds necessary for us to resume operations. It has also guaranteed the smooth flow of funds along our industry value chain,” said a manager of the group.
As the largest grain purchasing, storage, and processing company in Jiangxi Province, Jinjia Grain plays a prominent role in stabilizing the grain and oil markets in the province and its surrounding areas. Knowing that the company lacked the funds to purchase and process grain and oil, CDB Jiangxi Branch formed a special work group which quickly completed the loan approval process thanks to close collaboration between the front, middle, and back office. On February 14, 2020, the branch signed an agreement with Jinjia Grain to relend the company 20 million RMB in PBOC’s special loans to support its production and marketing of daily necessities including grain and oil. So far, 10 million RMB has been delivered.
Based in Fuzhou, Fujian Province, Yonghui Superstores lacked funds for maintaining normal operations of its chain stores in Chongqing. To satisfy its funding needs, CDB Fujian Branch and CDB Chongqing Branch established a joint work group which, supported by a “green channel,” completed credit review and granting within 24 hours and delivered a 600 million special loan to the group on the next day. The loan would be used by 283 Yonghui chain stores to purchase rice, noodles, grain, and oil, helping to guarantee the supply of daily necessities during the epidemic.
According to a CDB official, as a state-owned development finance institution, CDB will continue carrying out the decisions and arrangements of the CPC Central Committee and the State Council, taking full advantage of development finance, and making coordinated efforts to promote epidemic prevention and control while supporting economic and social development. It will take concrete and innovative measures to help enterprises resume operations and overcome challenges, thus contributing to the attainment of this year’s national goals, to the principle of building a moderately prosperous society in all respects, and to the completion of the 13th Five-Year Plan.
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