China to Increase Tech Funding, Secure Supply Chains

China plans to increase its financial support for technological innovation and take measures to secure its supply chain stability.

As Reuters reported Tuesday (April 19), citing a China Central Television broadcast, the government also wants to boost funding for less-developed and border areas, while putting controls on hidden local government debt.

China is making these investments amid its worst COVID outbreak in two years. Last week, the country’s central bank pledged financial backing for trucks and logistics companies in order to support China’s supply chain, with the bank asking lenders to “reasonably” extend and renew loans for the industry.

See also: Shanghai Regulator Warns eCommerce Platforms Against Pandemic Price Gouging

The People’s Bank of China has said financial institutions will be encouraged to up their support for the transportation sector with policies like re-lending and rediscounting tools. The central bank also plans to increase credit to air cargo companies.

The news comes a day after reports that Shanghai’s market regulator had summoned a dozen eCommerce firms to discuss price gouging during the COVID pandemic. The regulator warned platforms to improve the way they manage delivery riders and deal with practices such as improper price increases by riders.

China has seen a rise in supply chain slowdowns in places such as Shanghai, which is home to the world’s largest container port, following pandemic-related lockdowns. Congestion in both ports and road checks have extended delivery times and dampened production, indicating that China’s yearly growth target of 5.5% will be tough to reach.

Read more: PBOC Pledges Loans to Protect Supply Chain

Meanwhile, China’s supply chain troubles may trigger a ripple effect on rates for shipping containers. As the pandemic disrupts the flow of goods from China, reducing the need for container shipping, those shipping container prices have fallen.

As PYMNTS reported last week, the World Container Index said shipping along major routes from Shanghai to Los Angeles and Shanghai to New York had dropped 17% and 16%, respectively.