Beijing gets US$8.78 billion in loans for new financial district

China Development agreed to give Lize Holdings Co. a 10.9 billion yuan credit line to develop a 5.25 square kilometer area about 8 kilometers (5 miles) from central Beijing's Tiananmen Square, state-controlled Lize said in a statement. Industrial & Commercial Bank of China Ltd., Agricultural Bank of China and China Construction Bank Co. will provide a further 8 billion yuan each, according to agreements signed Tuesday.

“The development will provide a new impetus for growth” in the city after the government spent an estimated US$70 billion to host the 2008 Summer Olympics, Beijing Executive Vice Mayor Ji Lin said at a press conference. “It builds on the foundation laid by Beijing's Olympic construction to turn the city into a world-class financial center.”

Beijing, China's political capital, is vying with Shanghai and Hong Kong for investment by financial companies and has moved factories further away from the city center to combat pollution. The city accounted for 3 percent of China's gross domestic product in 2008, compared with 4.5 percent for Shanghai, according to the statistics bureau.

Economic growth in Beijing slowed to 7.8 percent in the first half from 9 percent in 2008. China announced a 4 trillion yuan fiscal package last year designed to keep the economy growing, with the state pledging money for power stations, waterways, roads and other public infrastructure projects.

The new financial district is south of Finance Street in western Beijing, where the central bank, bank regulator and securities supervisor are located. The head offices of ICBC, Agricultural Bank and Bank of China are in the vicinity.

The district will comprise office towers, shopping malls, luxury condominiums complete with 177 hectares (437.4 acres) of parks and a green belt next to a waterway, according to Lize, a holding company set up by Beijing's government to manage the project. The area can be accessed by four subway lines and will be near Beijing's second airport, which is scheduled to start construction next year.

Services industries accounted for 73.2 percent of Beijing's gross domestic product in 2008, China's state-owned Xinhua News Agency reported in January, citing Zhang Gong, chief of the Beijing Municipal Development and Reform Commission.

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