The central bank, together with the banking, securities, and insurance regulators, has issued a joint document to support the steel and coal industries in reducing excess capacity.

BEIJING, April 21 (Xinhua) — By reporters Wu Yu and Liu Zheng: On the 21st, the People’s Bank of China informed reporters that the central bank, together with the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission, has jointly issued a document to implement the State Council’s decisions and arrangements for resolving excess capacity and facilitating the transformation and upgrading of the steel and coal industries. The document aims to fully leverage the guiding role of finance to support these sectors in reducing overcapacity, deleveraging, cutting costs, and addressing structural weaknesses, thereby accelerating their transformation and upgrading and helping them emerge from difficulties.

　　The “Opinions on Supporting the Steel and Coal Industries in Resolving Overcapacity and Achieving Restructuring and Development,” jointly issued by the People’s Bank of China and three other ministries, stipulates that financial institutions shall adhere to the principle of differentiated treatment—providing support where appropriate while exercising prudent control—to meet the reasonable funding needs of steel and coal enterprises, while strictly curbing credit exposure to newly added capacity that violates regulations. For enterprises that have been loss-making for an extended period, have lost their ability to repay debts and market competitiveness, as well as for outdated production capacities, relevant loans must be resolutely scaled back or phased out.

　　The proposal suggests studying the implementation of “closed‑loop loan management” to support steel enterprises in strengthening R&D and the promotion and application of high‑end products in key sectors such as national defense and military industries, aerospace, aviation, high‑speed rail, nuclear power, and marine engineering. It also calls for vigorously developing energy‑efficiency loans and actively expanding business lines such as pledge‑based loans secured by future revenue rights under contract energy management, pollution‑rights‑secured loans, and carbon‑emission‑rights‑secured loans, thereby supporting steel and coal enterprises in carrying out energy‑saving and environmentally friendly upgrades and resource integration within the broader framework of reducing excess capacity. Furthermore, it advocates robust support for expanding exports in the steel and coal sectors and for accelerating the internationalization of these enterprises.

　　The document states that corporate debt restructuring should be advanced in a proactive yet prudent manner. For steel and coal enterprises that meet policy requirements and possess a certain capacity to repay their debts, debt‑restructuring measures—such as adjusting loan maturities and repayment schedules—should be implemented to help them overcome their difficulties. Furthermore, for eligible workers reassigned from the steel and coal sectors, efforts should be stepped up to enhance financial services supporting employment and entrepreneurship, with financial institutions encouraged to provide entrepreneurial guarantee loans in accordance with relevant policies and to set loan interest rates at reasonable levels.

　　The opinions emphasize that banking and financial institutions should comprehensively employ measures such as debt restructuring and bankruptcy liquidation to properly handle corporate debt and banks’ non‑performing assets, accelerate the write‑off of non‑performing loans and the bulk transfer of such assets, and resolutely curb malicious attempts by enterprises to evade or default on their debts. With respect to major issues like corporate debt restructuring and the disposal of non‑performing assets, it is essential to strengthen communication, coordination, and cooperation, jointly study and resolve these matters, refine risk‑response plans, and prevent risks in specific industries or among individual enterprises from escalating into systemic or regional financial risks.