China is pumping CNY360bn ($53.6bn) into eight state-owned financial institutions to strengthen the nation's banking sector and stimulate slowing economic growth, state news agency Xinhua reports.

The capital injection, organised by the Ministry of Finance, targets three major state lenders and five insurance firms. Beneficiaries include Industrial and Commercial Bank of China, Agricultural Bank of China, and China Export & Credit Insurance Corporation. Official statements indicate the funds will strengthen operating stability, enhance risk resistance, and boost credit delivery to non-financial companies.

The intervention highlights Beijing's growing concern over compounding economic vulnerabilities, including a prolonged real estate slump, trade tensions with Western partners, demographic contraction, and higher energy import costs triggered by the war in Iran. By reinforcing capital buffers at major state lenders, authorities are attempting to shield the domestic financial network from external shocks while encouraging direct credit flow into real-economy sectors.

Economic growth slowed sharply to 4.3% year-on-year in the second quarter of 2026, down from 5% y/y in the first quarter of 2026. Weak consumer demand undercut strong export performance over the period. In March, government officials cut the annual growth target to 4.5%-5%, marking the lowest target set by Beijing since 1991.