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

South China Morning Post:

Under the backdrop of the China-U.S. trade conflict, are there other relief measures for businesses with high dependence on foreign trade, apart from "no discontinuation or withdrawal of loans"? What specific support measures are there for small and micro enterprises? Thank you.

Li Yunze:

Thank you for your questions. In recent years, we have continued to deepen structural reforms on the financial supply side, guiding banking and insurance institutions to improve their service alignment and encouraging the development of differentiated, personalized products to better meet the diverse financial needs of enterprises of various sizes and types. In particular, to address the financing challenges faced by small and micro enterprises and private enterprises, we have taken the lead in establishing a dedicated financing coordination mechanism to promote the rapid and direct delivery of low-cost funds to businesses. So far, visits have been made to over 67 million business entities across the country, and 12.6 trillion yuan in loans have been issued, of which about one-third are credit loans.

Soon, the NFRA will work with relevant departments to introduce a package of policies supporting financing for micro, small and private enterprises, focusing on four key aspects:

First, we will increase supply. We'll continue to thoroughly and solidly implement the financing coordination mechanism while conducting extensive onsite surveys of enterprises. We'll increase the issuance of first-time loans, the renewal of loans and credit loans. Through these efforts, we'll drive the growth rate of inclusive small and micro enterprise loans to be higher than the average growth rate of various loans.

Second, we will reduce costs. We'll promptly pass on market interest rate benefits and internal fund transfer pricing advantages, while regulating cooperation between financial institutions and third parties. These measures will promote a steady decline in overall financing costs, further reducing the burden on enterprises.

Third, we will improve efficiency. We will drive banks to simplify internal procedures, improve loan approval efficiency, and flexibly meet various financing needs to alleviate the pressure on enterprises' capital turnover.

Fourth, we will optimize the environment. We will strengthen coordination among monetary, fiscal, tax, industrial and regulatory policies. We will accelerate improvements to relevant systems for guarantee-based credit enhancement, credit restoration and classification standards, creating a more conducive development environment.

Against the backdrop of increasing external shocks, we will formulate and implement a series of policies and measures for the banking and insurance sectors to support foreign trade development. Following market-oriented and law-based principles, we will continuously strengthen financial support.

First, we will strengthen financial relief for enterprises facing difficulties. We will expand the financing coordination mechanism to cover all foreign trade enterprises, and drive banks to accelerate the implementation of various policies to stabilize foreign trade, ensuring all eligible businesses can receive and renew loans as needed. We will provide targeted services using customized approaches for individual enterprises that are significantly affected by tariffs and facing temporary operational difficulties.

Second, we will intensify efforts to stabilize exports. We will optimize export credit insurance regulatory policies, enhance underwriting capacity, offer preferential rates, implement expedited claims processing and advance payment on claims, and stabilize enterprises' confidence in receiving orders and exporting. We will urge institutions to provide good financial services for key areas such as cross-border e-commerce and overseas warehouses. We'll support the development of specialized insurance, and guide banks to offer comprehensive, one-stop services that support the development of new foreign trade business models.

Third, we will contribute to expanding domestic sales. We will strengthen financing support for foreign trade enterprises shifting from exports to domestic sales. We'll guide the formation of domestic trade credit insurance consortiums, launch specialized products, and expand both the coverage and amounts of domestic trade credit insurance. We will take multiple measures to help boosting consumption and expanding domestic demand, open up space for foreign trade enterprises to expand sales channels, and help accelerate the integration of domestic and foreign trade. Thank you.