CBIRC Sets Work Tasks for 2020 – Small Enterprise Financing Costs to Fall a Further 0.5 Percentage Points

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The China Banking and Insurance Regulatory Commission (CBIRC) has outlined its key work tasks for 2020 at a recently convened meeting.

CBIRC’s “2020 Full Year Banking and Insurance Sector Regulatory Work Meeting” (2020年全国银行业保险业监督管理工作会议) said that three focal themes for work in 2020 would include:

  1. Firmly winning the war for the prevention and dissolution of financial risk.
  2. Vigorously undertaking work in relation to the Six Stabilities; driving increases in the quality and efficiency of financial services for the real economy, guiding more funds towards key areas and weak links, further driving a 0.5 percentage point reduction in micro and small-enterprise financing costs, and maintaining the pace of growth of such loans above average growth in all loans.
  3. Comprehensively deepening financial sector supply-side structural reforms, raising the level fo external opening.

Other areas of emphasis highlighted by the CBIRC work meeting included:

  • Ensuring that “houses are used for occupation and not speculation,” and strictly preventing the illicit flow of funds into the real estate market.
  • Strengthening financial support for social services.
  • Strengthening financial services for private enterprise – and private manufacturing enterprises in particular.
  • Implementation of financial policy measures to support live pork production.
  • Vigorously develop green finance, and launch a batch of financial products that are beneficial for environmental protection.
  • Improve market-based mechanisms for the pricing of vehicle insurance.

According to data from CBIRC renminbi loans increased by 17 trillion yuan in 2019, for a widening of 1.1 trillion yuan compared to 2018.

Total private enterprise loans increased by 4.25 trillion yuan, while the financial inclusion micro-and-small enterprise (MSE) loan balance was 11.6 trillion yuan, for a YoY rise of 25%.

The financial inclusion MSE loans of China’s big five state-owned banks increased by 55% in 2019, while the integrated financing costs of MSE loans fell by over 1 percentage point.

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