Sixteen banks announced on Wednesday an aggregated lending quota worth one trillion yuan (146.2 billion U.S. dollars) to support the development of China First Automobile Works (FAW) Group Corporation, the most famous Chinese automaker.
Headquartered in Changchun, capital city of Jilin Province in northeast China and famous for its trucks and Red Flag cars, FAW is a state-run enterprise with a sales volume of 3.35 million units of vehicles in 2017. It accounted for 75 percent of the total GDP of Changchun last year.
The 16 banks include the China Development Banks, the China Construction Bank, the Bank of China, the Industrial and Commercial Bank of China, the Agriculture Bank of China, the Bank of Communications, the Postal Savings Bank of China, the China Commercial Bank, the Shanghai Pudong Development Bank, the China Minsheng Bank, the China Everbright Bank, the China CITIC Bank, Industrial Bank Co., Ltd., the Ping An Bank, the China Guangfa Bank and the Bank of Jilin.
FAW declined to comment on what areas the one-trillion-yuan loans will be used for. However, it indicated that it had close cooperation with the 16 banks in the areas of financing, cash management, New Energy Vehicles (NEVs), and Intelligent Connected Vehicles (ICV) sectors.
The share prices of FAW and its affiliates jumped upward towards the daily limit on China’s stock market on Thursday.
Analysts said the move is part of a bigger effort by China as to revitalize the old industrial base in the northeastern region of the country.
The economic growths of the three provinces of Liaoning, Heilongjiang and Jilin in northeast China have been falling behind the country’s other provinces, and have remained in the bottom ten provinces since 2013, according to data from the National Bureau of Statistics
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