China’s four state-owned banks have initiated a plan to raise $73bn by selling their assets, to to cut down on their liabilities.
Among the banks include China Construction Bank and Agricultural Bank of China, which recently sold a combined $8.1bn worth of debt to raise capital. Industrial & Commercial Bank of China and Bank of China, which also raised the same amount through sales earlier in Augus, reported the Wall Street Journal.
In addition, China has allowed five local governments to open asset-management companies in eastern and southern China to buy non-performing loans from local banks and thus help them in refreshing their balance sheets.
JP Morgan Asset Management Asia chief market strategist Tai Hui was quoted by the Walls Street Journal as saying: "They are setting up the pieces of the jigsaw for the financial system to be much less state dependent and more market driven."
