China has set up a bailout fund with a fundraising goal of RMB 100 billion ($14.3 billion) to deal with potential bond defaults by central government-controlled state-owned enterprises (SOEs), reported Caixin.
The new fund, established by China Reform Holdings Corp. Ltd. and 31 other centrally controlled SOEs, has so far raised RMB 10 billion from these enterprises, China’s top SOE watchdog said in a statement Thursday. The fund was designed to supply emergency funding to centrally controlled SOEs short on cash so they can avoid defaults.
China Reform, a state-owned investment company supervised by the State-owned Assets Supervision and Administration Commission (SASAC) under the central government, will manage the fund, company Chairman Zhou Yubo was quoted by state-run newspaper China Securities Journal as saying.
Ming Ming, an analyst at Citic Securities Co. Ltd.,said the fund will help further improve the creditworthiness of centrally controlled SOEs, which have long helped keep China’s economy stable.