SCIO briefing on financial policy package to stabilize the market and expectations

Shou Xiaoli:

Thank you, Mr. Pan. Now, let's give the floor to Mr. Li.

Li Yunze:

Good morning. I'm very pleased to meet with you again and answer your questions. First, on behalf of the NFRA, I would like to extend my sincere gratitude to the media for your long-standing support for and attention to our financial regulatory work.

Since the beginning of this year, the NFRA has resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council. Moreover, we've carefully followed the guidance from the April 25 meeting of the Political Bureau of the CPC Central Committee. We've strengthened our bottom-line thinking and expanded our policy measures. We've actively responded to external shocks and made solid progress in risk prevention, regulatory enforcement, and development promotion.

First, the overall performance of the financial sector remains stable. Currently, banking and insurance institutions are conducting all business activities in an orderly manner, with major regulatory indicators all within healthy ranges. Large financial institutions maintain a solid foundation, clearly serving as an anchor of stability for the financial system. Small- and medium-sized financial institutions have shown significant progress in both reform and risk reduction efforts. In the first four months, the capital adequacy ratio of banks and the solvency adequacy ratio of insurance companies maintained a steady upward trend. The non-performing loan ratio declined by approximately 0.1 percentage point year on year, while the provision coverage ratio increased by around 10 percentage points over the previous year. It can be said that the financial industry's safety buffer continues to strengthen.

Second, we're seeing the ongoing positive impact of our regulatory policies. We've strengthened the leading role of regulation and accelerated the improvement of regulatory frameworks. We've also revised and issued over 30 systems, including those related to corporate governance, regulatory ratings and consumer protection. We have formulated opinions on high-quality development in sectors such as banking, insurance and asset management, aiming to enhance specialized and professional development capabilities. We are guiding the industry to further advance cost reduction and efficiency improvement, thereby strengthening the foundation for sustainable development. We are improving the capital replenishment mechanism. Capital reinforcement for large commercial banks is accelerating, while enhancement plans for major insurance groups have been placed on the agenda. Meanwhile, local governments are also replenishing the capital of small- and medium-sized financial institutions through multiple channels in an orderly manner. These measures will further strengthen the resilience of the financial system and its capacity to support high-quality development.

Third, the quality and efficiency of services have been significantly improved. We have developed specialized implementation plans for technology finance, green finance, pension finance and inclusive finance. We've issued multiple financial policies to bolster consumption and foreign trade. In addition, we are increasing support for major national strategies, enhancing security capacity in key areas, promoting consumer goods trade-ins and encouraging large-scale equipment renewals. We have also strengthened efforts to safeguard people's livelihoods. In the first four months of this year, the banking and insurance sectors provided about 17 trillion yuan in new financing to the real economy through loans, bonds and other means. Since the expansion of the loan renewal without principal repayment policy in September last year, 4.4 trillion yuan in loans have been renewed for medium, small and micro enterprises, better meeting their ongoing financing needs. The insured amount by short-term export credit insurance rose 15.3% year on year, providing strong support for stabilizing foreign trade. From January to April this year, the insurance industry paid out about 1 trillion yuan in claims, and more than 10 million vehicles were covered by the new energy vehicle insurance. At the same time, insurance companies set aside more than 10 trillion yuan in long-term reserve funds for endowment and health insurance payments.

Next, we will follow the requirements of the CPC Central Committee and the State Council, further strengthening our sense of responsibility, urgency and initiative in ensuring implementation. We will intensify efforts to implement established policies, accelerate the preparation of incremental policies, continuously improve our response plans, and work to firmly consolidate the fundamentals of economic recovery and growth. In the near future, we will introduce the following eight incremental policies.

First, we plan to accelerate the rollout of financing systems compatible with the new model of real estate development. This will help further stabilize the real estate market.

Second, we plan to expand the scope of pilot projects for the long-term investment of insurance funds to bring more incremental funds into the market.

Third, we plan to adjust and improve regulatory rules to further lower the risk factors for insurance companies' stock investments, helping to stabilize and revitalize the capital market.

Fourth, we'll launch a package of policies to support financing for small and micro businesses and private enterprises as soon as possible. We'll deepen and solidify financing coordination mechanisms to help stabilize businesses and the broader economy.

Fifth, we will formulate and implement a series of policy measures in the banking and insurance sectors to support the development of foreign trade. We will provide targeted services to business entities most affected by tariffs and make every effort to help them maintain stable operations and expand markets.

Sixth, we plan to revise and issue regulatory measures on merger and acquisition (M&A) loans to promote the accelerated transformation and upgrading of industries.

Seventh, we plan to expand the range of eligible entities allowed to establish financial asset investment companies to include qualified commercial banks with nationwide business networks. This will help boost investment in sci-tech innovation enterprises.

Eighth, we will develop guidelines for the high-quality development of technology insurance to improve its risk sharing and compensation roles, and to provide strong support for technological innovation. Thank you.