The central bank is providing cheap capital to commercial banks, so they can in turn support local financial players in the country by extending more credit to financially stressed companies.
Commercial banks can already apply to the central bank for access to the capital at a subsidized interest rate, but the support programme has not been announced in any official statement.
According to estimates from the rating agency China Chengxin International Credit Rating, local governments and their companies across China had unpaid bills of 4.5 trillion yuan (approximately SEK 6.7 trillion) last year. This corresponds to just over 3 percent of China's GDP.
