B&R 'big opportunity' for domestic financial bodies

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The financing demand for projects related to the Belt and Road Initiative is estimated to reach 10 trillion US dollars in the next five years, creating a big opportunity for Chinese enterprises and financial institutions, said Chairman of China Minsheng Bank Hong Qi at the 2017 Belt and Road Investment and Finance Forum, co-organized by Minsheng Bank and Caixin media, in Beijing on Thursday.

In fact, China Minsheng Bank has shown interest in the initiative for years.

Besides direct financial aid and services, the bank has arranged a credit quota to guarantee financial resources for the Belt and Road Initiative, and also partnered with many enterprises to establish industrial funds to back their overseas investments.

Meanwhile, it joined hands with Peking University and the National Development and Reform Commission to optimize the allocation of resources by better implementing the Public-Private Partnership (PPP) scheme.

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A stable domestic economy is crucial for the global strategies of any country. As China's seventh largest lender, China Minsheng Bank also pays close attention to the systemic risks in China's economy.

Hong noted that the Chinese economy is in a transition period during which many problems, including overcapacity, excessive leverage, and de-stocking have emerged.

"These problems not only pose risks to the real economy, but more fundamentally, they are the root causes of financial risk. As a result, de-leveraging, de-stocking, and eliminating excessive capacity will be the key to preventing systemic financial risk," Hong said.

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As for the banking sector, Hong maintained that it should allocate financial resources according to China's economic restructuring and regional development plans.

"For example, we should restrain lending to enterprises with overcapacity issues. We should also control credit extended to enterprises that have failed to meet environmental protection standards," Hong said.

That means more financial and policy support should be diverted into new and emerging industries, private enterprises and to small and micro businesses, which Hong said were the bank's "priorities".

Minsheng Bank also supports China's strategic development plans for the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, and the Xiongan New Area.