Massive loan to Chinese aviation
11 / 01 / 2009
CHINESE banks have awarded a huge loan package to the country’s aviation industry to shore it up during the global economic troubles.
China Aviation Industry Corporation, the main state-owned aircraft maker, was awarded 176 billion yuan (US$25.7 billion) in domestic bank loans although in a statement the company said that the eventual amount may total 250 billion yuan ($36.5 billion).
“The credit quota shows the financial sector has confidence in the high-tech strategic aviation industry despite the current economic crisis,” said Mr Lin Zuomin, the company’s general manager.
The company will use the loan to finance its development of cargo and passenger planes, helicopters and engines.
However, analysts suggest that the award is more of a show of support to the government rather than a demonstration of banking’s confidence in the company.
The Chinese aviation industry recorded a loss of 3.95 billion yuan ($500 million) in the first 11 months in 2008.