With Banks Pinched by Rescues, China's Central Bank Aids State Allies

As China’s leadership pulled together very public efforts to address local-government debt strains and a stock sell-off in recent months, officials took less conspicuous steps to strengthen the state’s lending capacity.

With the fixes for the equity market and local authorities relying on credit from commercial banks, a recapitalization of China’s so-called policy banks will help sustain loan growth. The central bank has put $48 billion into China Development Bank Corp., people familiar with the matter said this month. Export-Import Bank of China got $45 billion, Caixin magazine reported.