China’s top financial regulators led by the central bank vowed Wednesday to further support the financial needs of private companies, urging banks to ramp up lending to the private sector.
This underscores Beijing’s efforts to reignite entrepreneurial spirit amid mounting economic headwinds.
Authorities are formulating policy documents, in which China’s financial institutions are urged to set annual targets for serving private firms and expand loans to companies that are first-time borrowers, the state-run Securities Times reported.
Regulators said they will aim to raise the share of loans to private companies out of total lending, adding that overall financial support to private companies should match the sector’s contribution to China’s economy.
Private companies including platform businesses will be encouraged to list overseas and they will be granted better access to funding via sales of bonds and equities, according to the newspaper.
The central bank will keep liquidity reasonably adequate in the future and more financial resources will be channeled into China’s smaller private companies, the state-owned Beijing News quoted People’s Bank of China Gov. Pan Gongsheng as saying.
Attendees at the meeting included the central bank, top foreign exchange and securities regulators and the newly-established National Administration of Financial Regulation. The Shanghai and Shenzhen bourses, representatives from major state lenders and private companies were also present at the meeting, state media reported.
In recent months, Beijing has rolled out a flurry of supportive measures to boost China’s struggling private sector, but hasn’t announced any major stimulus plans that economists say are significant enough to move the needle, as economic pressures keep piling on.
Investment by private companies dropped 0.5% in the first seven months of the year, widening from the 0.2% decline in the January-June period.
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