Interest rates cut further for SMEs

The Chinese government decided yesterday to reduce the real financing interest rates for small and micro firms.

The Chinese government decided yesterday to reduce the real financing interest rates for small and micro firms.

China will stick to a prudent monetary policy which will be eased or tightened to the right degree, while maintaining reasonably sufficient liquidity to ensure that the loan’s real interest rates for small and micro firms will be lowered, according to a statement released after an executive meeting of the State Council chaired by Premier Li Keqiang.

The market quotation interest rate mechanism for commercial banks’ loans will be improved, while medium, small and micro firms will enjoy more support in financing by bonds and other means. Financial institutions should issue more bonds this year than 2018, striving to top 180 billion yuan (US$26.18 billion) in 2019.

Some cities will be encouraged to conduct a three-year-long reform pilot in improving financial services for private, small and micro firms, according to the statement.

The government also aims to ease financing difficulty for private, small and micro firms by expanding intellectual property pledge financing.

More credit support will be channeled to the manufacturing and services sectors, with the former seeing higher outstanding total loans, medium and long-term loans and credit loans this year than 2018.

In a bid to nurture more professionals, the State Council decided to expand the coverage of national scholarships and grants for vocational college students, raise the financial assistance level, and set up a national scholarship for secondary vocational education.

The newly revised Law on Promoting Small and Medium-Sized Enterprises has been implemented across China over the past year, yielding positive effects, according to a report released by the top legislature yesterday.

The report, based on a law enforcement inspection conducted by the National People’s Congress Standing Committee from February to May, was submitted to the ongoing bimonthly session of the NPC Standing Committee for deliberation.

Central and local authorities have stepped up financial support by issuing a raft of tax cut and fee reduction policies, the report read, noting that 77 percent of the SMEs have been benefited.

The fundraising difficulties for enterprises have been alleviated.

As of end of March, the banking sector’s outstanding loans to small and micro-sized enterprises stood at 34.77 trillion yuan, up 9.55 percent year on year, the report said.

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