China strengthens financial support for coal, electricity production
A power plant in Beijing, China, January 17, 2021. /CFP

A power plant in Beijing, China, January 17, 2021. /CFP

China's top banking and insurance regulator pledged to strengthen financial support for coal and electricity production and maintain order amid surging prices in the commodity market.

The most-traded thermal coal futures contract on China's Zhengzhou Commodity Exchange hit a record high of 1,393 yuan ($216) a tonne on Thursday ahead of China's week-long National Day holiday. Over the past month, the price has surged nearly 75 percent.

The recent power outage has affected residents and factories in parts of China. However, authorities have vowed to ensure power supply in the winter season while attributed the short supply of coal and its rising prices as the primary reason for the power disruptions.

The China Banking and Insurance Regulatory Commission released a circular calling to satisfy proper financing needs of power, coal, steel and non-ferrous metal producers to ensure supplies and stabilize prices.

It urged banks and insurance institutions to offer sound financial services to secure energy and electricity supplies for the winter and spring and actively support major coal-producing areas and key enterprises to increase thermal coal supply.

The circular prohibits bank and insurance funds for speculating on coal, steel, non-ferrous metals and other bulk commodities. It also prohibits withdrawing or cutting off loans from power and coal producers and relevant projects that qualify for financial support.

The commission vowed to strictly investigate illegal activities such as speculation, hoarding, and price gouging and has devised punishments according to the law.

(With input from Xinhua)

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