China to step up financial support for supply chains

FILE PHOTO: People work inside a factory of a shipbuilding industrial park at a port in Qidong city of Nantong, Jiangsu province, China March 16, 2020. China Daily via REUTERS/File Photo

BEIJING (Reuters) - China will step up support for key firms engaged in supply chains in advanced manufacturing, services and trade sectors, the central bank and other state agencies said in guidelines issued on Tuesday, amid a deepening rift with the United States.

The financial support will be provided through credit, bonds and other financing tools, and banks and other financial institutions should respond promptly to meet the needs of core, strategic firms, the guidelines said.

China has boasted the most complete manufacturing supply chains in the world, but tension with the United States has exposed China’s vulnerability as it relies heavily on U.S. high-tech products, such as semiconductors.

To reduce this exposure, China has unveiled a “dual circulation” strategy to steer industry towards relying more on domestic markets and technology to secure its supply chains.

Reporting by Lusha Zhang and Kevin Yao; Editing by Andrew Heavens & Simon Cameron-Moore