China Calls On Banks to Support State Projects as Economy Slows

China urged banks to continue funding local government projects under construction and refrain from calling in loans as the country works through an economic downturn.

Banks shouldn’t refuse funds to projects approved before the end of 2014 even if borrowing agencies are unable to meet payments, the State Council said Friday in joint announcement with Finance Ministry, central bank and regulator. The council, China’s Cabinet, also urged local governments to use fiscal support as short-term working capital for ongoing projects to prevent or reduce risk.