China said it will inject 300 billion yuan (US$44 billion) into state-owned banks this year to guard against systemic risks and strengthen financing for technology companies amid intensifying rivalry with the US.

The measures were outlined in the annual government work report presented at the opening of the National People’s Congress (NPC).

The report stated that Beijing will further replenish capital at financial institutions and prudently dispose of non-performing assets across the sector, according to Reuters.

Analysts expect Beijing to inject capital into Industrial and Commercial Bank of China and Agricultural Bank of China, following the recapitalisation of four other major state-owned banks last year.

The move comes as the world’s second-largest economy continues to face a prolonged property downturn, weak consumer confidence and deflationary pressures.

Banks have seen rising bad loans linked to struggling property developers and highly indebted local governments.

Last year, Beijing carried out a roughly US$72 billion recapitalisation of major state banks to strengthen core capital as lenders grapple with narrower profit margins and deteriorating asset quality.

Authorities also plan to regulate competition among financial institutions and encourage consolidation among small and medium-sized local financial institutions.

The government will establish a 100 billion yuan fiscal-financial coordination fund to boost domestic demand through measures including loan interest subsidies, financing guarantees and risk compensation.

China also pledged to address financial risks linked to real estate, local government debt and smaller financial institutions.

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