China to Inject $54 Billion Into State Banks and Insurers to Boost Economy

China is preparing to put 360 billion yuan, about $53.6 billion, into eight state-owned banks and insurance companies as Beijing seeks to shore up the financial system and revive slowing growth.

The finance ministry is leading the cash injection, state news agency Xinhua reported. The package covers three major lenders and five insurers, including Industrial and Commercial Bank of China, Agricultural Bank of China and China Export & Credit Insurance Corporation.

Xinhua said the measure would strengthen the institutions’ operating capacity, resistance to risk and ability to serve the real economy. The Global Times said the funding would give banks and financial institutions more resources to channel into credit while improving their ability to withstand external shocks during a period of global financial uncertainty.

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will help further enhance their sound operating capabilities, risk resistance capabilities, and ability to serve the real economy

The move is the latest in Beijing’s effort to reshape the economy amid a shrinking workforce, an aging population, a years-long property market slump and continuing trade and technology rivalry with the United States. China is also dealing with trade tensions with the West and the impact of the Iran war on oil prices.

Growth slowed sharply between the start of April and the end of June as weak domestic demand and higher oil prices overshadowed strong exports. Official figures released in July showed the economy grew 4.3% in the second quarter, below Beijing’s annual target and down from 5% in the first quarter.

Beijing cut its growth target in March to a range of 4.5% to 5%, the lowest target since 1991. Some analysts said the change gave the government room to acknowledge existing weakness. President Xi Jinping has long treated financial stability as a national-security priority.

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will give banks and financial institutions more resources to channel into credit for the real economy, while strengthening their ability to withstand external shocks at a time of global financial uncertainty