The head of China’s banking authority says that its financial inclusion drive has already proven successful in reducing the cost and difficulty that small businesses experience when seeking funds.
Speaking at the Lujiazui Forum in Shanghai on 13 June Guo Shuqing (郭树清), chair of the China Banking and Insurance Regulatory Commission (CBIRC) and party secretary of the Chinese central bank, highlighted the results of efforts by Beijing to shore up financial inclusion in the Chinese economy.
As of the end of May five major Chinese banks had increased their financial inclusion micro and small enterprise (MSE) loans by 23.7% compared to the end of last year, fulfilling the majority of their full-year quotas.
The average interest rate was 4.79%, for a decline of 0.65 percentage points compared to the full year rate for last year.
According to Guo the Chinese financial system is currently in the process of “thoroughly implementing new growth concepts, vigorously driving supply-side structural reforms, continuing to optimise the financial institution system, market system and product system; and endeavouring to provide high-quality high-efficiency financial services to the real economy and people’s lives.”
Guo also highlighted a range of key focal areas during the process of the Chinese financial system’s transition:
- Firmly establishing the business concept that the customer is the core;
- Developing more specialised and personalised financial institutions;
- Financial market systems better adapting to the lifecycles of enterprises;
- Establishing and improving corporate governance structures with Chinese characteristics, given that poor corporate governance has always been an internal threat;
- Promptly and adequately imposing strict punishments for breaches of laws and regulations;
- Having the determination to change the distribution structure of financial assets, and vigorously growing various institutional investors including publicly offered funds, private funds, insurers, trusts and wealth management companies;
- Firmly preventing a revival of structurally complex products, raising the efficiency of fund usage, and effectively resolving the problem of funds “fleeing from the real to the empty;”
- Confronting the problem of the financialisation of real estate in certain parts of China.