Beijing Pushes for Reduction in Comprehensive Financing Costs of Chinese Enterprises

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China’s financial authorities have just issued a new directive calling for reductions in the financing costs for Chinese enterprises.

The China Banking and Insurance Regulatory Commission CBIRC) recently issued the “Notice Concerning Further Standardisation of Credit Finance Fee Collection and Reducing the Comprehensive Costs of Enterprise Financing” (关于进一步规范信贷融资收费 降低企业融资综合成本的通知) in cooperation with several other central government departments, including the Ministry of Finance, the Chinese central bank and the National Development and Reform Commission (NDRC).

The Notice aims to “further standardise fee collection and management at all stages of credit finance, maintain the right to information, independent selection rights and fair transaction rights of enterprises, and reduce the integrated financing costs for enterprises.”

Key points of the notice include:

  • Cancellation of certain fees that relate to enterprises.
  • Encouraging banks to engage in advance credit assessment.
  • Requiring that banks clarify their fee collection items.
  • Strengthening management of third party organisations, and assessment of fee collection by cooperative organisations.
  • Strengthening of “white list” regulation of enterprises and projects.

The Notice is scheduled to come into effect on 1 January.

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