The Chinese central bank has touted the success of efforts to reduce financing costs for businesses in 2020 during efforts to mitigate the economic impacts of the COVID-19 pandemic.
As of the end of 2020 the weighted average interest rate for enterprise loans in China was 4.61%, for a decline of 0.51 percentage points compared to the end of 2019 and the lowest level since seen since 2015, according to data from the People’s Bank of China (PBOC).
PBOC deputy-governor Chen Yulu (陈雨露) said that the financial system had employed multiple means to reduce the financing costs of Chinese enterprises, successfully fulfilling the target of transferring 1.5 trillion yuan in profits to China’s real economy.
Premier Li Keqiang called for banks to “sacrifice” 1.5 trillion yuan in their 2020 profits at a State Council meeting on 17 June last year, in order to reduce the financing costs of small businesses in China.
Chen said that China would “continue to deepen financial supply-side structural reforms, and financing costs for the real economy will markedly fall.”