China's central bank on Tuesday urged the nation's major lenders to frontload loan issuance in 2023 and provide targeted support to the weak links of the economy.

Chinese lenders normally frontload their lending at the start of the year after they receive new lending quotas. The call by the central bank may prompt more lending at the first quarter of the year when economic activity started to return to normal after Covid-19 infections peaked.

In a meeting jointly chaired with China's banking regulator, the People's Bank of China urged the nation's banks to improve "operational and financing cash flows" for the country's high-quality real-estate companies. It said banks could roll over debt held by systemically important property developers while helping their equity supplement, in order to guide their balance sheets back to a safe range.

Beijing introduced a so-called three red line policy in 2020 to rein in excessive borrowings by the real-estate sector by restricting the amount of debt they could raise. It is unknown whether the rhetoric by the PBOC Tuesday may suggest a change in such a policy.

In the meeting, the central bank also asked banks to better use the special loans, which were launched to ensure delivery of unfinished homes this year. It also pledged lenders to steady their loans to the nation's property developers.

The PBOC also urged banks to primarily meet funding demand by medical suppliers in China while stepping up support for the nation's small businesses.


Write to Barcelona Editors at barcelonaeditors@wsj.com


(END) Dow Jones Newswires

01-10-23 0633ET