China will inject the equivalent of 38.5 billion euros into its banks and insurance companies, in an operation that represents the largest recapitalization of its financial institutions in almost two decades. The plan was announced in a context of economic slowdown in the country.
The world's second-largest economy saw its growth decline during the second quarter, which prompted Chinese authorities to take measures to strengthen the financial system. The Beijing government thus decided to intervene directly to stabilize the sector.
The recapitalization plan aims to strengthen the capacity of Chinese financial institutions in the face of current economic challenges. This is the largest capital injection operation in China's financial sector in nearly twenty years.
