Huge stimulus! China's largest bank, ICBC, to provide RMB 3 trillion in energy financing over next 5 years

[Stranagor]

China's largest bank, Industrial and Commercial Bank of China (ICBC), signed a strategic cooperation agreement with the National Energy Administration (NEA) on October 25 to provide 3 trillion yuan ($470 billion) in intended financing support for the energy sector over the next five years.

A statement on the NEA's website on Monday announced the information, saying the two will jointly explore effective ways to help green energy development and promote carbon peak and carbon neutrality.

This is one of the NEA's measures to secure energy and power supplies for China in the winter, but more importantly, to secure important financial support for the development of the energy sector over the next five years.

Many people may not have a concept of the 3 trillion-yuan figure, but China's economic stimulus package was 4 trillion yuan in 2008 after the global financial crisis.

While the support is geared toward China's energy sector as a whole, a document from China's State Council released by Xinhua News Agency on Sunday said China will ensure that it achieves carbon peak and carbon neutrality on schedule.

China's share of non-fossil energy consumption will reach about 20 percent by 2025, and that share will reach more than 80 percent by 2060, according to the document.

China's largest bank, ICBC, to provide RMB 3 trillion in energy financing over next 5 years

Most people may not have noticed that China's energy sector is receiving a huge financial boost.

cnevpost.com

 

[nang2]

Use flood to fight against flood.

 

[MH.Yang]

Use flood to fight against flood.

China is saving the world. If China does not increase liquidity, how can it produce enough goods to eliminate inflation all over the world?

 

[nang2]

China is saving the world. If China does not increase liquidity, how can it produce enough goods to eliminate inflation all over the world?

You don't need to use stimulus. Just simply convert the earned dollars to RMB. You will quickly increase liquidity in this way since dollar liquidity has increased. Adding more liquidity on top of that is for a different purpose.

 

[MH.Yang]

You don't need to use stimulus. Just simply convert the earned dollars to RMB. You will quickly increase liquidity in this way since dollar liquidity has increased. Adding more liquidity on top of that is for a different purpose.

Yes, the Chinese government usually needs to issue additional CNY to exchange a large amount of dollars generated by the trade surplus, which can also bring liquidity.
However, this time the Americans made too big a hole, they over issuance of $4 trillion. If China produces goods at a normal rate and exchanges surpluses, it will take a long time to eliminate inflation all over the world.
Americans can no longer hold on, The global economy is facing collapse, and China has no choice, China can only immediately issue a large number of additional CNY to stimulate production.

 

[nang2]

Yes, the Chinese government usually needs to issue additional CNY to exchange a large amount of dollars generated by the trade surplus, which can also bring liquidity.
However, this time the Americans made too big a hole, they over issuance of $4 trillion. If China produces goods at a normal rate and exchanges surpluses, it will take a long time to eliminate inflation all over the world.
Americans can no longer hold on, The global economy is facing collapse, and China has no choice, China can only immediately issue a large number of additional CNY to stimulate production.

This benevolent, self-sacrificing picture of China won't convince anyone. China's production has been hampered despite recovered demands from overseas and increasing trade surplus. But you should have already known the reasons. Now, adding a huge stimulus is like drinking coffee while taking sleeping pills. Bizarre at best. There must be something else going on in the head of your leaders.

 

[MH.Yang]

This benevolent, self-sacrificing picture of China won't convince anyone. China's production has been hampered despite recovered demands from overseas and increasing trade surplus. But you should have already known the reasons. Now, adding a huge stimulus is like drinking coffee while taking sleeping pills. Bizarre at best. There must be something else going on in the head of your leaders.

You mean the energy crisis? China's energy crisis has been lifted.
A few days ago, the NDRC issued an order to increase coal production in Shanxi and Inner Mongolia, now the price of coal has fallen to 360 CNY per ton. Most cities have abolished power and production restrictions.

https://baijiahao.baidu.com/s?id=1714560475638081253&wfr=spider&for=pc&searchword=%E9%99%90%E7%94%B5%20%E5%8F%96%E6%B6%88

 

[nang2]

You mean the energy crisis? China's energy crisis has been lifted.
A few days ago, the NDRC issued an order to increase coal production in Shanxi and Inner Mongolia, now the price of coal has fallen to 360 yuan per ton. Most cities have abolished power and production restrictions.

https://baijiahao.baidu.com/s?id=1714560475638081253&wfr=spider&for=pc&searchword=%E9%99%90%E7%94%B5%20%E5%8F%96%E6%B6%88

That is one possibility. Increased coal production is only for a short-term relief. I believe Xi ultimately wants to reduce dependence on that, thus the need to drive up the production of other types of energy in the long run.

 

[MH.Yang]

That is one possibility. Increased coal production is only for a short-term relief. I believe Xi ultimately wants to reduce dependence on that, thus the need to drive up the production of other types of energy in the long run.

In fact, China has 13% of the world's coal reserves, and its output was once the first in the world.
In order to protect the environment and balance the excessive trade surplus, China has closed and reduced a large number of coal mines.
However, if China in case of energy crisis, China still has the ability to break out huge coal production capacity in a short time.

 

[nang2]

In fact, China has 13% of the world's coal reserves, and its output was once the first in the world.
In order to protect the environment and balance the excessive trade surplus, China has closed and reduced a large number of coal mines.
However, if China in case of energy crisis, China still has the ability to break out huge coal production capacity in a short time.

It is not the sheer output of it that matters. It is the level of dependency upon it. In addition, just because it can re-open many mines in short notice now, it doesn't mean it can do that in the future, particularly if many mines have been closed for a very long time and mining population has shrunk significantly. A more balanced energy portfolio generally reduces the impact of any crisis in one type of energy. Much like a balanced stock portfolio.

 

[Shotgunner51]

reach more than 80 percent by 2060

Net Zero, yes that's inline with China's commitment in Paris Accord to reach carbon neutrality by 2060, a firm commitment underwrite by solid actions.

 

[casual]

China needs to move away from fossil fuels. Crucial technology here is energy storage technology and nuclear reactor technology. Hopefully a good chunk of this found will go into R&D. Clean energy technology is the future "oil" and the country that controls this technology will control economy in the next couple of decades.