USEUROPEAFRICAASIA中文双语FrançaisHOMECHINAWORLDBUSINESSLIFESTYLECULTURETRAVELWATCHTHISSPORTSOPINIONREGIONALFORUMNEWSPAPERChina Daily PDFChina Daily E-paperMOBILEBusinessMacroCompaniesIndustriesTechnologyMotoringChina DataFinanceTop 10Home / Business / FinanceBanks see little risk involving initiative
By LI XIANG | China Daily | Updated:2017-05-12 06:59An employee counts yuan banknotes at a bank in Huaibei, Anhui province, Nov 25, 2016. [Photo/]Credit risks in markets linked to the Belt and Road Initiative are under control, and major Chinese banks are building firewalls to ensure sustainable financing for overseas infrastructure projects, senior banking executives said on Thursday.
They were responding to concerns that Chinese investment and loans would increase the debt burden of some developing countries and the risk of potential sovereign credit defaults would undermine the asset quality of Chinese banks.
Ding Xiangqun, vice-president of China Development Bank, a State-owned policy bank, said that Chinese loans will not increase the local debt burden and the risks associated with the loans are under control.
“A majority of the projects we supported have generated sufficient cash flow to pay back the loan and the interest,” Ding said at a news conference, stressing that economic value is one of the priorities when the bank selects projects.
Sun Ping, vice-president of the Export-Import Bank of China, another Chinese policy lender, said the bank has established risk-control mechanism on a country-by-country basis.
“We have set a debt limit on each country. When the debt level reaches the limit, we will carefully control our lending pace to that country,” Sun said, adding that widespread sovereign debt defaults and rising nonperforming loans will be unlikely.
The outstanding value of loans extended by the two policy lenders to markets related to the Belt and Road Initiative have reached $200 billion, according to the China Banking Association.
Big Chinese commercial banks also have participated. The Industrial and Commercial Bank of China, the worlds biggest bank by assets, has 412 projects in its pipeline involving a total investment of $337.2 billion, according to the bank.
While the overall risk in projects under the Belt and Road Initiative is controllable, Chinese banks should be cautious about the credit risks in countries with high deficits and external debts, analysts said.
Pan Guangwei, executive vice-president of the China Banking Association, said it is necessary to build an inclusive interbank association among commercial banks, policy banks and multilateral development agencies to fill the financing gap and to ensure long-term funding for the projects.Related StoriesICBC leads in finance projects on trade routesBelt and Road receives global backingBelt and Road to tap local currencies, says PBOCs deputy governorWhat you need to know about Belt and Road ForumChinas listed private firms bet big on Belt and RoadPhotoTrash to treasure: Robot created in name of environmentCultural products fair kicks off in ShenzhenIranian businessman finds success in YiwuChinese companies boost Irans rail networkTop 10 most valuable brands in ChinaPolish dairy farmer wants to tap Chinese marketMost Viewed in 24 HoursTop 10Top 10 e-connected countries along Belt and RoadEditors picksB&R opportunity for Chinese mobile operatorsZMJ eyes expansion beyond coal sector with German assetChina DataWhat you need to know about Belt and Road ForumQ&A With CEOCapacity cuts seen as opportunities for RioBiggest oil producer expands ties with ChinaSpecialChinas Q1 economic dataMade in China 2025BACK TO THE TOPHOMECHINAWORLDBUSINESSLIFESTYLECULTURETRAVELWATCHTHISSPORTSOPINIONREGIONALFORUMNEWSPAPERChina Daily PDFChina Daily E-paperMOBILECopyright 1995 -var oTime = new Date();
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