Urban Renewal

Starting from the financing project for shantytown transformation in Liaoning in 2005, CDB continued to increase supports for affordable housing projects focusing on shantytown transformation. Since the 18th National People’s Congress, in accordance with arrangements made by the central government and the State Council, we placed urban renewal at the top of our agenda, and set up the Housing Finance business unit pursuant to the decision of the 43rd executive meeting of the State Council held on 2 April 2014 to ensure intensive, professional and refined management of shantytown transformation, fulfilling the role of development finance as the “blood bank” for relevant projects.

As of the end of 2015,CDB had granted loans for shantytown transformation projects totaling RMB1555 brillion, of which RMB1,305.8 billion were still outstanding. RMB750.9 billion worth of shantytown transformation loans were granted in 2015 alone, marking a 1.8-fold increase from 2014, contributing greatly to the early completion of 5.8 million shantytown transformation units across the country as well as ensuring funding for follow-up construction projects. We are selected as the “Best Shantytown Transformation Contribution Bank of the Year” in the Chinese financial institution gold medal list 2014.

(1) Expediting delivery of loans for urban renewal projects. We consistently sped up credit assessment and the loan payment process, and granted an aggregate of RMB 1.55 trillion to projects included in the national urban renewal program, with an increased bias in favor of shantytown transformation projects in coal mining subsidence areas in northeastern regions, state-owned mines, forests, reclamation areas, resource-exhausted cities and areas with a high concentration of tier-3 enterprises – loans issued to shantytown transformation projects in central, western and northeastern regions, accounted for 62% of the total, benefiting a large number of shantytown transformation projects in Arxan (Inner Mongolia), Beiliang (Baotou), etc. RMB19.5 billion of loans were granted to shantytown transformation projects in mining subsidence areas in the Northeast, sponsoring the full-scale construction of the mining subsidence projects in the “four coal mining cities” in Heilongjiang.

(2) Deepening bank-government cooperation. We set up the shantytown transformation collaboration mechanism jointly with the Ministry of Housing and Urban-rural Development (MHURD), and stepped up relevant policy research efforts to jointly resolve issues encountered in related operations, aligning the policies to three-year plans of the local governments to meet the financing needs of shantytown transformation projects. We carried out special planning for shantytown transformation during the 13th “Five-year Plan” period, and were actively involved in the national and local affordable housing planning with systematic financing suggests proposed.

(3) Financing mechanism innovation. We actively experimented innovative financing models, e.g. government procurement of service and shantytown transformation through PPP (public-private partnership), offered guidance to local governments in applying innovative financing models in collaboration with MHURD (two official documents were jointly issued by CDB and MHURD), and granted RMB303.8 billion worth of credit through innovative financing models; promoted new financing models such as debt-loan financing and syndicated loans, guided private capital to participate in shantytown transformation projects, and introduced the market competition mechanism to enhance investment and operating efficiency; issued China’s first asset securitization of RMB 10 billion for shantytown transformation projects. As of the end of 2015, CDB successfully attracted private capital of RMB254.9 billion to invest in shantytown transformation projects.

(4) Actively pushing forward shantytown transformation through monetized resettlement. We lifted the limit on monetized resettlement, and worked together with local governments to improve relevant resettlement measures and compensation schemes ensuring effective integration of shantytown resettlement with existing housing properties. RMB 258.8 billion were granted for monetized resettlement in full-year 2015, effectively driving commercial housing property destocking on the real estate market.

(5) Effectively reducing financing cost. The interest rate for shantytown loans was lowered to 4.145% after seven rounds of reduction, and relevant intermediary business charges were cancelled to reduce the financing cost of shantytown transformation projects.

Poverty Alleviation

In line with our commitment to “strengthening China’s competitiveness and improving people’s livelihood”, CDB has been providing active support for national strategies as well as the poverty alleviation undertaking in the country. As of the end of November 2015, we had granted poverty alleviation loans of RMB 1.34 trillion covering 727 out of the 832 state-level poverty-stricken counties and contiguous poverty-stricken counties, with outstanding loans exceeding RMB800 billion. Priority was given to infrastructure construction, specialty industry development, rural poverty eradication, education and public health projects. As well as offering long-term credit financing for poverty alleviation, we effectively supported market and system building in poverty-stricken areas and worked to improve and develop the local financial ecosystems.

Adhering to bank-government cooperation, we focused relevant efforts on the establishment of poverty alleviation and development mechanisms by uniting various parties and mobilizing resources. A development finance poverty alleviation agreement was signed with the State Council Leading Group Office of Poverty Alleviation and Development to develop efficient and targeted poverty reduction business models such as supporting poverty alleviation in poor villages through specialty industry development and micro-credit poverty alleviation loans. Opinions to support the development in Wulingshan and the surrounding areas and the relevant implementation plan were jointly formulated with the State Ethnic Affairs Commission, and cooperation agreements were signed with the local governments in Hubei, Hunan, Chongqing and Guizhou to push forward regional poverty alleviation pilots in the provinces. MoUs were signed with several provinces and autonomous regions including Guizhou, Sichuan and Guangxi to tackle the most crucial challenges in poverty alleviation and ensure that effective poverty eradication and development efforts are made on a complete scale.

Proactive planning and synergistic financing services, focusing on scientific development in poverty-stricken areas. Leveraging the bank’s expertise and industry advantages, we worked together with local governments and clients in development planning, and developed systematic financing programs. For example, the Poverty Alleviation and Development Advisory Report for Gansu Province and the Plan to Boost Well-coordinated Urban-Rural Development and the Establishment of a Well-off Society in Guizhou Province have been formulated for the provincial governments in Gansu and Guizhou, respectively. As a result, local poverty alleviation and development initiatives progressed significantly with improved strategic and forward-looking planning and sharpened guidance.

Actively supporting infrastructure construction in poverty-stricken areas through perseverant model innovations, relying on CDB’s long-term financing advantages. We supported infrastructure projects closely connected with the livelihood of residents in poverty-stricken areas including rural roads, drinking water safety, rural power grids and renovation of dilapidated buildings, following the principles of “government leadership, system building and centralized borrowing and repayment”.

Sticking to efficient and targeted poverty alleviation and supporting poor villages and farmers to develop local specialty businesses through wholesale financing, allowing them to rise out of poverty with sustainable income. Efforts were made to introduce the lending model featuring “four platforms” (i.e. management, financing, guarantee and public disclosure platforms” and one association (i.e. credit association), supporting production activities among poverty-stricken rural households by giving full play to the leveraging role played by public finance and the bank’s advantages in wholesale financing businesses. In Guizhoou, for example, we granted loans total RMB 1.9 billion to support the development of local specialties, e.g. tea, Chinese herbal medicine, cattle and sheep farming, with loan discount paid with the local poverty aid funds of RMB200 million.

Poverty alleviation through education and talent development. Prioritizing education as the focus of poverty alleviation efforts, we granted loans to students from poverty-stricken areas wherever financial assistance is required and justified, and supported local school safety projects, relevant examples including the “Candle Initiative” jointly sponsored with Western China Human Resources Development Foundation, and poverty alleviation training courses held for local government officials in Wulingshan and other poverty-stricken areas.

CDB commits its poverty relief efforts to targeted disadvantaged counties through both short-term aid and long-term development.

Modern Agriculture

Agricultural modernization is an important component of China’s “four synchronous modernizations” strategy and has remained one of the priorities in CDB’s financing support. While ensuring adequate supply, price stability, quality and safety of agricultural products, we stepped up financing model innovations and consistently increased financial support for agricultural modernization, leveraging our advantages and resources as a development finance institution. Financing has been provided targeting key projects such as agricultural infrastructure development (e.g. high-standard farmlands), construction of national modern agriculture demonstration parks, establishing the agricultural industry chain and Chinese agricultural enterprises “going abroad”, contributing greatly to maintaining national food security, expediting agricultural modernization and increasing income for the farming population. As of the end of November 2015, CDB had granted an aggregate of RMB182.4 billion of agricultural loans, of which RMB62.3 billion was still outstanding.

Increasing long-term credit support for agricultural modernization focusing on high-standard farmlands and other agricultural infrastructure projects. Dedicated itself to ensuring national food production and security as the central responsibilities, CDB gave full priority to high-standard farmland cultivation in support of modern agricultural development, and launched high-standard farmland cultivation pilots jointly with the Ministry of Finance combining public finance with credit lending. As of the end of November 2015, we granted a total of RMB 2.16 billion of agricultural loans (of which RMB 2.11 billion was outstanding) to support the development of over one million mu (or 66,66 hectares) of high-standard farmlands. Outstanding long-term loans for agricultural infrastructure construction amounted to RMB43.6 billion, accounting for 70% of the total value of outstanding agricultural loans.

Actively supporting modern agricultural businesses throughout the industry chain to enhance the competitiveness of the Chinese agricultural industry. Taking into account the actual local conditions in major national grain producing areas, animal husbandry provinces and agricultural specialty regions, CDB sponsored a group of well-engineered large-scale farming, husbandry and processing projects with geographical advantages and helped them grow into well-known agricultural brands, including Wuchang rice cultivation in Heilongjiang, vegetable exports base in Shouguang (Shandong) and dairy farming communities in Fengning (Hebei). A large number of agro-industrial enterprises including Beijing Capital Agribusiness Group, Yurun Group, DQY Ecological Farming and Zhonghe Group have established themselves as industry leaders with financing supports provided by CDB, thereby driving modern agricultural development through agricultural produce processing. As of the end of November 2015, CDB had granted an aggregate of RMB 45 billions of loans (of which RMB 15 billion was outstanding) and supported over 1,300 agro-industrial projects nationwide.

Focusing on national modern agricultural demonstration parks as the entry point, efforts were made to innovate and optimize business models to support modern agricultural development through development finance. Through the introduction of an innovative model featuring “four platforms” (i.e. management, operating, guarantee and public disclosure platforms) and “one association” (i.e. credit association), CDB sponsored groups of demonstration projects and supported the growth of emerging agricultural businesses. We also financed rural land system reforms and promoted land contractor right mortgage pilots in demonstration parks in Qingan (Heilongjiang), Yushu and Baicheng (Jilin), Chengdu (Sichuan) and Baise (Guangxi). In addition, by mobilizing banking, government, business, etc. resources, supports were provided for the development of eco-friendly and high-efficiency agricultural facilities at demonstration parks in Wuxi and Peixian (Jiangsu) through the introduction of market-oriented financing entities, filling the vacuum of capable financing entities for agricultural projects.

Serving the national economic opening strategy, and steadily promoting transnational agricultural cooperation and “going global” of Chinese agricultural enterprises. Guided by the principle of “proactive planning”, we drew up agricultural resource development plans for 25 countries in Asia, Africa and South America, and continuously improved strategic and forward-looking planning and strengthened guidance in relevant business operations. As a member of the national inter-ministerial China-foreign agricultural cooperation program, CDB has been actively involved in policymaking for international agricultural cooperation, and offered synergistic financing supports for agriculture-related Chinese enterprises “going abroad”. In this respect, international agricultural cooperation projects funded by CDB include soybean farms in Argentina (Chongqing Grain Group), overseas rubber plantations (Guangdong Guangken Rubber Group) and Bright Food Group’s acquisition of the second largest cereal company in the UK. All the projects served to improve the global competitiveness of Chinese agricultural enterprises, ensure key national agricultural product supplies and facilitating the implementation of the national economy-based foreign policy.

Water Resource Projects

CDB has always attached great importance to water resource management and supported a large number of major national water conservation projects and the construction of water facilities closely related to people’s livelihood. Over the past two decades since its foundation, CDB provided financing support for key national and regional water conservancy projects including the Three Gorges project, South-to-North Water Diversion, Xiaolangdi Dam, Datengxia Dam (Guangxi) and Integrated Watershed Management of Xin’an River; irrigation infrastructure projects such as irrigation transformation in Shannxi province; rural water projects such as the drinking water safety project in poverty-stricken counties in Gansu province; and water projects related to people’s livelihood, e.g. financing for dam reinforcement, urban flood control and water conservancy emergencies. The bank is well regarded in recognition of its remarkable contribution to local economic development, effective allocation of regional water resources, residential water supply and environmental water conservation.

During its 48th executive meeting in 2014, the State Council made important arrangements to push forward 172 key water conservancy projects. As the lead financier for water conservancy projects, CDB went all out to speed up construction of relevant projects, in strict accordance with the decisions made at the meeting. As of November 2015, CDB had pledged a total of RMB 192.7 billion regarding 44 projects (73 separate projects) including Datengxia Dam (Guangxi) and Al Tash Dam (Xinjiang). Of the total amount pledged, RMB 103.2 billion had been delivered, and outstanding loans stood at RMB 85.4 billion. Specifically, CDB Development Fund financed 46 major national water conservation projects with an aggregate of RMB 11.7 billion of funds injected.

As of November 2015, CDB granted an aggregate of RMB637.2 billion of water conservancy loans, of which RMB 382 billion was still outstanding, supporting nearly 2,500 water conservation projects. More than 50% of water conservancy loans provided by financial institutions in China were granted by CDB, making it the lead financier for Chinese water conservation projects.

Elderly Care

In pursuance with arrangements made by the Party Central Committee and the State Council in response to China’s aging population and the need of developing elderly care services, CDB increased financing support for the establishment of the elderly care service system. Major breakthroughs have been achieved in the development of a financial support model covering over 95% Chinese households and communities with pensioners, tailored to the elderly care service system in China relying on “family as the basic unit, supported by community-based service and supplemented by healthcare institutions”.

Taking Zhanggong District –downtown Ganzhou in Jiangxi province – as the pilot area, we planned and launched the PPP-based Zhanggong district community (village) home care service centers jointly with Zhanggong district government. We granted RMB 130 million of loans and invested RMB 13 million of special construction funds to sponsor 72 community-based home elderly service centers in Zhanggong, providing the elderly with services such as housekeeping, shopping, food delivery, medical care, recreation, advising, foster care and day companionship relying on elderly care facilities (e.g. community rooms, health rehabilitation and recreation and care centers for senior residents) and online facilities such as smart call service, to meet their material, recreational, etc. needs on a day to day basis. Upon completion, the centers will cover a total of 110,000 elderly people in Zhanggong district, giving all local senior residents access to basic pensioner services; 11 centers have been built so far and were warmly received by the local pensioners.

We introduced the “Xing Fu Li” home elderly service pilot project through government procurement in Jilin, jointly with the provincial department of civil affairs. Having invested RMB 14 million of special construction funds and RMB 4.8 million of loans, CDB will continue to increase financing inputs in the project, which is expected to cover 220 urban communities and serve over 200,000 local residents on a daily basis. As a result, traditionally homebound pensioners can rely on catering, healthcare, bathing, etc. assistants provided by social services.

Since 2015, CDB has pledged elderly service loans of over RMB 7 billion, of which more than RMB 4 billion has already been delivered so far, with the value of outstanding loans standing at above RMB 3 billion. The loans cover various aspects of elderly care services ranging from affordable housing for pensioners and healthcare to cultural and community services. Next, CDB will focus financing supports on home and community based elderly care projects benefitting a maximum number of households in line with the principle of “inclusive elderly care”. In addition, efforts will be made to explore other financing models for elderly services to improve people’s livelihood and facilitate harmonious social development.