China Development Bank (CDB) has refuted recent media reports that it has stopped issuing loans to local governments for the support of shantytown renovation projects, though there has been more caution about taking on further debt for this purpose.
“China Development Bank has been strictly implementing the country’s policies on shantytown renovations,” the bank told Caixin.
Sources from the bank did concede, however, that some local authorities have themselves halted investments in shantytown redevelopment projects due to Beijing’s wider restriction on government debt. But the pledged supplementary lending (PSL) program – a means of government spending by issuing loans to policy banks for development projects – has not been affected, they said.
PSL currently constitutes around 80% of shantytown project funding.
Bank data shows that the CDB has provided RMB 436.9 billion ($66.2 billion) in development loans for shantytown projects in the first five months of the year.