China is injecting 300 billion yuan ($45 billion) into its largest banks and insurers, part of the nation’s biggest recapitalization in almost two decades, to shore up the strength of its financial system and sustain lending as economic growth slows.
The Ministry of Finance will issue special bonds to recapitalize eight financial institutions, including Industrial & Commercial Bank of China Ltd., Agricultural Bank of China Ltd. and People’s Insurance Company (Group) of China Ltd., according to official announcements on Sunday.
The package adds to a combined 500 billion yuan of government injection since early 2025 as Beijing steps up its effort to rejuvenate the world’s second-largest e
conomy. Premier Li Qiang recently urged officials to “strive to achieve” annual growth targets, while policymakers are considering incremental steps such as loan subsidies and other financing support for businesses and consumers.
While China’s financial institutions hold adequate capital buffers, Beijing’s recapitalization plan aims to provide more firepower for lending to businesses and households. Ensuring financial stability remains a cornerstone of Pre
sident Xi Jinping’s agenda, particularly as China navigates a protracted trade and technology rivalry with the US. Beijing has aggressively sought to ring-fence risks stemming from a distressed property sector and ballooning local government debt.
“The recapitalization of major state-owned financial institutions has been a policy arrangement for the past two years, rather than an emergency measure,” said Liao Zhiming, an analyst at Huayuan Securities Co. “The key is to
make capital arrangements in advance so that the banks have sufficient capacity to meet regulatory requirements and support the real economy.”
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Shares of ICBC fell 0.78%, while Agbank’s stock slid 0.69% in early Hong Kong trading. ICBC, the world’s largest bank by assets, has risen more than 20% this year. People’s Insurance was little changed.
Agbank is seeking up to 160 billion yuan, while ICBC is targeting 100 billion yuan in separate private placements, according to filings to the Shanghai stock exchange on Sunday. Both banks say they will use all the funds to replenish their core tier-1 capital.
The Ministry of Finance will subscribe to 130 billion yuan in Agbank’s placement and 70 billion yuan in ICBC’s. China National Tobacco Corp. is also a big subscriber in both.