Japanese Mega Bank SMBC help Chinese companies to cut emissions

The Sumitomo Mitsui Banking Corporation (SMBC) one of Japan’s top mega Bank will assist Chinese companies facing tougher pollution measures by helping them procure natural-gas-fired boilers and other environmentally friendly equipment.

The Sumitomo Mitsui Financial Group unit will sign an agreement Thursday with a committee of the China Energy Conservation Association, an industry group supervised by the Chinese government. The association has 1,100 member companies, including manufacturers, banks and leasing firms.

Under the direction of President Xi Jinping, China is stepping up its fight against air pollution by toughening factory inspections. Authorities are also restricting the use of coal to fuel boilers and power stations, and promoting natural gas as a cleaner alternative.

While there are signs that air quality is improving, the policy is producing side effects including production stoppages at plants that have been slow to install new cleaner-burning equipment. SMBC, along with sister company Sumitomo Mitsui Finance and Leasing, will work with the association to assist companies looking to upgrade.

The bank sees the tie-up as an opportunity to expand its network of Chinese clients, since many mainland businesses have trouble procuring funds. It also looks to use the deal as a foothold to introduce more Japanese technology and know-how to the Chinese business community.