China to step up financial support for supply chains

China will step up support for key firms engaged in supply chains in advanced manufacturing, services and trade sectors, the central bank and other state agencies said in guidelines issued on Tuesday, amid a deepening rift with the United States.

The financial support will be provided through credit, bonds and other financing tools, and banks and other financial institutions should respond promptly to meet the needs of core, strategic firms, the guidelines said.

China has boasted the most complete manufacturing supply chains in the world, but tension with the United States has exposed China’s vulnerability as it relies heavily on U.S. high-tech products, such as semiconductors.

To reduce this exposure, China has unveiled a “dual circulation” strategy to steer industry towards relying more on domestic markets and technology to secure its supply chains.