The Chinese government has just had to inject nearly $100 billion from its foreign exchange reserves into the country's two leading banks to revive the struggling economy.

China has just decided to inject nearly 100 billion USD into two major banks of the country to revive the economy - Photo: Reuters

“The provision of additional funding to the two major banks shows that the People’s Bank of China is trying to invest finance in practical economic areas, such as exports and infrastructure construction,” said Wang Shengzu, a China economist at Barclays Financial Group.

According to the Economic Times, on August 18, the People's Bank of China transferred 48 billion USD to the China Development Bank and 45 billion USD to the Export-Import Bank of China.

Last year, the world's second largest economy, China, grew by only 7.4%, the lowest rate since 1990. And this year, growth will continue to be sluggish, with the first two quarters of the year seeing economic growth of only 7.0% each quarter.

The Chinese government also set a target of 7% economic growth for the whole year of 2015.

In a move to boost the economy, China has cut interest rates four times since last November and also lowered banks' reserve requirement ratios.

“The funds released during the previous monetary easing policy did not go into concrete economic activities. Instead, most of the money flowed to financial institutions and the stock market,” added financial expert Wang.

According to TTO