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The approval for China"s commercial banks to carry on lending business for merger and acquisition (M&A) will exert positive influence mainly on such industries as the steel, power, real estate and nonferrous metals, according to market analysts.
On Tuesday, China Banking Regulatory Commission (CBRC), the country"s top banking regulator, announced granting commercial banks the right to provide loans to domestic enterprises conducting M&A so as to meet the mounting demand for funds.
"Merger and acquisition in China are mainly led by the government currently; thus, principal industries of long cycle, such as the steel, power, real estate and nonferrous metals, will be affected the most by the new loan policy," said Liu Tiejun, a senior analyst with Haitong Securities.
An expert noted that the implementation of the new policy is good for pushing forward China"s economic restructuring and industrial upgrading and integration with market forces, and for giving financial backup to change of economic growth mode.
However, some analysts said that benefits to the steel industry should be considered prudently.
"The acquisition in the steel industry will affect benefits of many local governments since many steel plants are state-owned. And China"s commercial banks may restrain the highly risky overseas acquisition in the steel industry because international network of Chinese banks is still weak comparatively," stated Zou Jian, secretary general of Metallurgical Mines" Association of China (MMAC).
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