State Council Wants Bonds to Resolve Financing Difficulties of China’s Private Enterprises


A recent meeting of China’s State Council convened by Premier Li Keqiang has called for the expanded use of corporate bonds to help Chinese businesses better access funds.

The executive meeting of the State Council held on 22 October said it would “establish support tools for private enterprise bond financing” and use “market-based methods to help resolve the financing difficulties of enterprises.”

“Private enterprises are key builders of Socialism with Chinese characteristics,” said an official statement from the Chinese government on the meeting.

“They are a key force for driving economic and social development, and [the government] needs to release more policies that benefit the stable and healthy growth of private enterprise.

“The meeting has decided to expand the vigour of support for re-lending and re-discounting, raise the capability and level of financial services for small and micro and private-enterprises.

“With regard to the current financing difficulties of private enterprise, use market-based methods to support bond financing by private-enterprise.

“The People’s Bank of China lawfully provides initial capital support to specialist institutions, entrusts them with operation in accordance with the market and risk prevention principles, to provide additional credit support to those private enterprises that are operating normally and have met with provisional liquidity difficulties.

“When conditions are mature, the funds of commercial banks and insurance companies willing to participate may be introduced, for the establishment of joint risk-sharing mechanisms.”

The State Council meeting also called for the increased use of regtech measures with the establishment of an “Internet + regulation” system