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China’s central bank recently held a meeting with private companies and financial institutions to study measures to step up financial support for the private economy.
The People’s Bank of China will implement the prudent monetary policy in a targeted and forceful way, maintain liquidity reasonably ample, strengthen the coordination between financial, fiscal and industrial policies and guide more financial resources to the private economy, Pan Gongsheng, Governor of the PBOC, said at the meeting.
The central bank will draft guidance document for step up financial support for private companies, push commercial banks to optimize internal control management; support local governments to actively address delayed payments to private firms; push for expansion of the instruments for private companies’ bond financing, known as “the second arrow”;and strengthen the financial market’s support for private companies’ development, he said.
Pan urged financial institutions to actively create a good atmosphere for supporting private companies’ development, improve the incentive mechanism for serving private companies to increase the willingness, capability and sustainability of bank loans to private firms.
Financial institutions should learn private companies’ financial demand, respond to their concerns, do a good work in building connections with private firms, and private a reliable, high-efficient and convenient financial services to private companies, Pan said.
Financial institutions should implement differential housing credit policies, meet private property developers’ reasonable financing needs and promote the stable and healthy development of the real estate sector, he said.
Representatives from companies including Yili Group, Hongqiao Group, Longfor Group, Chint Group, New Hope Group, CIFI Holding, Midea Real Estate, Hongdou Group, financial institutions and the National Association of Financial Market Institutional Investors (NAFMII) attended the meeting.
Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB), two of the country’s largest state-owned banks, pledged to take a leading role in promoting the stability of bank loans to private firms, expand the coverage of credit lines for small and micro firms and support private firms’ bond issuance.
The NAFMII, the self-regulatory body overseeing China’s interbank market, vowed to step up the support for the instruments for private companies’ bond financing, known as “the second arrow and accelerate bond market innovation to meet private companies’ diversified financing needs.