NDRC Unveils Five Measures to Support Bond Issuance by Chinese Private Enterprise

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The National Development and Reform Commission has unveiled a raft of measures to boost bond issuance by China’s private enterprises.

According to state media the five key policy measures include:

  1.  Actively supporting the bond financing of high-quality private enterprises. NDRC will support high-quality private enterprises in applying for and issuing enterprise bonds, while encouraging funds raised via bonds to be used for key national strategies, in key areas and for key projects.
  2. Expand the vigour of support for private enterprise provided by “small and micro-enterprise increased-credit collective bonds” (小微企业增信集合债券). NDRC will encourage large and medium-sized corporations throughout China to issue such bonds, the funds from which will be entrusted to commercial banks to make loans to promising private enterprises.
  3. Supporting the issuance of venture capital enterprise bonds. NDRC will gives its support to qualified enterprises issuing venture investment fund bonds, the funds from which will be used to establish or increase the capital of venture investment fund, to drive entrepreneurship and innovation in China.
  4. Coordinated promotion of the handling of private enterprise bond defaults and assisting private enterprise bailouts. NDRC will provide the necessary financial support and assistance to private enterprises whose have meet with cash flow difficulties and bond defaults, but that have promise and are optimising the economic structure. NDRC will also provide bails outs to key private enterprises that are leaders in regional industries, mainstays of employment or situated in emerging sectors.
  5. Coordination with financial regulators to implement private enterprise bond financing support plans and equity financing support plans.

The announcement from NDRC arrives just after it gave its approval to automaker BYD’s issuance of 6 billion yuan in corporate bonds, to be used for clean energy vehicles and environmental projects involving parts, batteries, battery materials and urban transit.

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