By Yin Lei
China’s banking and insurance regulator put forward measures on Saturday to shore up small and medium-sized businesses, infrastructure projects and foreign trade, among other purposes.
In these measures, the role of inclusive finance is stressed in supporting small and medium-sized enterprises, private companies, and businesses related to rural and agricultural development.
These measures urge banks and insurance firms to offer these players low-cost credits, especially to the leading private companies with robust primary businesses, good governance, low debts and sound risk control. Trust companies are encouraged to strengthen their support for poverty alleviation, education and rural children’s welfare.
More loans will go to infrastructure projects. Insurance capital, which can serve as a long-term investment, is asked to fuel national strategies and key projects.
Consumer finance will see a boost so that consumption can be a bigger driver of economic growth. More financial products and services in this regard will be available to meet the different needs of Chinese consumers.
Proper preferential treatments will be given to export-oriented enterprises in need of financing to keep China’s foreign trade on a stable track. These companies will also enjoy more funding by way of pledging.
The above measures call for financial institutions to exit from zombie enterprises to make room for more credits, use asset securitization and credit asset transfers to free up their stock assets, and step up the handling of non-performing loans. They are also encouraged to execute their debt-to-equity projects and participate in the new ones.
The investment scope, ratio and repayment of insurance capital will see further reforms to enhance its use efficiency. The insurance sector is asked to stabilize the expectations of businesses and individuals by offering better coverage for their property and life.
Other aspects covered by these above measures include a better transmission mechanism of monetary policies, improved services for customers, and more efficiency in financial institutions.
