State Council Flags 2022 Focus on Financial Inclusion and Manufacturing Development Following Central Economic Work Meeting

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A meeting of China’s State Council convened by Premier Li Keqiang just following the Central Economic Work Meeting has highlighted a range of policy goals for 2022, with an especial emphasis on financial inclusion for small businesses and greater support for the manufacturing sector.

The meeting held on 15 December passed a resolution that covered the following economic policy goals:

  1. Exchanging financial inclusion support tools for deferring principal and interest payments on loans to micro and small-enterprises in response to COVID-19 for financial inclusion micro-and-small loan support tools. From the start of 2022 until the end of June 2023 the Chinese central bank will provide financial inclusion micro-and-small enterprise and individual industrial and commercial registrant loans to local legal person banks, providing funds at a rate of of 1% of the balance increase volume, in order to encourage growth in financial inclusion micro-and-small loans.
  2. Starting from 2022, China will include financial inclusion micro-and-small loans under reloan support plan management for the support of small enterprises and rural businesses. The 400 billion yuan reloan quota originally used to support financial inclusion micro-and-small loans may be rolled over, and when required the reloan quota will be further increased. Qualified legal person banks that make financial inclusion micro-and-small loans will be able to apply to the Chinese central bank for discount reloan funding support.
  3. Establishment of a nationwide integrated financial credit services platform network, with a focus on servicing micro, small and medium-sized enterprises; helping banks to increase their ability to service micro, small and medium-sized enterprises, and driving the sharing of information on registration, administrative penalties, judicial decisions and enforcement, as well as tax and welfare payments.
  4. Improvements to performance assessments of the provision of micro, small and medium-sized loans by financial institutions. Supporting financial institutions in the issuance of special financial bonds for micro and small-enterprises, and expanding the scope of government financial guarantee operations for micro-and small enterprises.

The State Council also stressed the importance of China’s manufacturing sector, referring to it as the “major foundation and support for economic development.”

“China is a great manufacturing power, yet there is still a considerable lag compared to international advanced manufacturing levels,” said the meeting. “China must expand the vigour of support for the manufacturing sector and firmly drive the progress of the manufacturing sector from the medium-low-end to the medium-high end.”

To this end the meeting called for policy measures including:

  1. Implementing tax and fee reduction policies that favour the manufacturing sector, and expanding the vigour of policies that provide value-added tax reimbursements for research and development expenses.
  2. Expanding medium and long-term loans for the manufacturing sector.
  3. Developing advanced manufacturing, and accelerating the digital transformation of the manufacturing sector.
  4. Encouraging large-scale enterprises to drive more small and medium-sized enterprises to integrate with supply chain innovations.
  5. Deepening and expanding international cooperation, and supporting foreign enterprises to expand investment in medium nd high-end manufacturing and R&D centres.
  6. Maintenance of the stability of industrial supply chains.