China’s State Council has flagged a raft of further measures to help the financial system and economy weather the impacts of the COVID-19 outbreak.
A regular meeting of the State Council held on 31 March confirmed that it would “further strengthen financial inclusion support measures for micro, small and medium enterprises,” with measures including:
- Further implementing targeted required reserve ratio (RRR) cuts for small and medium-sized banks,
- A one trillion yuan increase in the re-loan re-discount quota for small and medium-sized banks,
- Guiding net financing via credit-category bonds that is one trillion yuan greater than the previous year, to expand low-cost financing channels for private enterprise and small and medium enterprises
- Supporting financial institutions in the issue of 300 billion yuan in micro and small financing bonds to be used for micro and small loans,
- Encouraging the development of supply chain financial products,
- Spurring micro, small and medium enterprises to obtain full year accounts receivable financing of 800 billion yuan,
- Improving mechanisms for the sharing of financial risk.
On 16 March China implemented a targeted RRR cut of 0.5 to one percentage points for banks that satisfied requirements, while qualified joint-stock banks also enjoyed an additional targeted reduction of one percentage point to support the issuance of financial inclusion loans.