The head of China’s banking regulator has flagged measures to better support the Chinese central government’s financial inclusion ambitions for 2019.
“The government work report makes reference to increasing loans by the big state-owned commercial banks to small and micro-enterprises by at least 30% this year – I am confident that this can be achieved,” said Guo Shuqing (郭树清), head of the China Banking and Insurance Regulatory Commission (CBIRC), at a ministerial press conference held on 5 March as part of China’s Two Sessions legislative meetings.
Guo said that China’s regulatory authorities are currently driving the implementation of the “Several Opinions Concerning Strengthening the Financial Sector’s Servicing of Private Enterprises” (关于加强金融服务民营企业的若干意见), as well as further implementing policies for the support of private enterprise, and small and micro-enterprises in particular, as part of efforts to resolve the problems of financing being difficult and expensive.
“Effectively facilitating loans, lending support and financial support to small and micro-enterprises and private enterprise is the most important part of financial supply-side structural reforms,” said Guo.
In addition to the banking sector Guo pointed to the potential role of China’s insurance sector, whose total investment funds currently stand at around 16 trillion yuan, more of which could be directed towards small and micro private enterprises.
Guo also called for the establishment of a strong, multi-tier capital market in China, encompassing large-scale exchanges, regional equity markets, private funds and venture capital funds.
According to Guo this has already been proven to be an effective investment channel overseas, and can better support more innovative enterprises that are riskier and subject to greater potential for loss.
As of the end of 2017 small and micro-enterprises made a contribution of at least 60% to Chinese GDP according to a report from National Business Daily, alongside at least 50% of tax revenues and 80% of urban jobs.
Small, medium and micro-enterprises were also responsible for 65% of patents and over 80% of new products.