China’s banking regulator has issued a directive to expand the provision of financial services to the domestic manufacturing sector.
The China Banking and Insurance Regulatory Commission (CBIRC) recently issued the “Notice on Further Driving Financial Services for the High-quality Development of the Manufacturing Sector” (关于进一步推动金融服务制造业高质量发展的通知), for the purpose of “driving the banking and insurance sectors to improve financial services for the manufacturing sector and better support the high-quality development of manufacturing.”
The Notice calls for Chinese banks to “expand the intensity of financial support for key areas including advanced manufacturing, strategic emerging industries and the transition and upgrade of traditional industries.”
“Banks must focus on weak links in the development of the manufacturing sector, make effective and sufficient use of existing finance to support policy, and actively support enterprises that have met with temporary difficulties due to the pandemic and whose prior credit records are sound,” the Notice said.
CBIRC is also requiring banks to “actively and rationally cede profits to manufacturing sector enterprises,” as well as further strengthen compliance and risk controls, and expand the ability to dispose of the non-performing loans of manufacturing enterprises.
The provision of financial services to manufacturing sector development will be included in ongoing regulation and monitoring by CBIRC’s offices in future, while CBRIC will engage in cooperation with local governments to improve the policy environment for manufacturing sector growth.