SCIO briefing on China's financial statistics in H1 2023
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E-mail China.org.cn, July 28, 2023
Xing Huina:
Due to the limited time, we will have the last two questions.
21st Century Business Herald:
Recently, a State Council executive meeting deliberated and adopted an action plan to support financing for technology-based enterprises. What are the measures to support financing for technology-based enterprises and what progress has been made so far? Thank you.
Liu Guoqiang:
I will answer these questions, thank you. Currently, the Chinese economy has entered a new development stage, where technological innovation serves as strategic support for implementing the new development philosophy and fostering a new development pattern. Financial regulatory departments including the PBC have earnestly implemented the decisions and arrangements of the CPC Central Committee and the State Council, prioritized providing sound financial services for technological innovation, continued to advance construction of markets and mechanisms, enriched financial support tools and methods, and channeled more financing support to technology-based enterprises. China's loans to technology-based enterprises have maintained a high growth rate and the quality and efficacy of loan services have improved significantly. By the end of June 2023, outstanding loans for specialized and sophisticated SMEs that produce new and unique products amounted to 2.72 trillion yuan, up 459.8 billion yuan, representing a growth rate of 20.4% year on year, and maintaining a growth rate of over 20% for 14 consecutive months. The weighted average interest rate of outstanding loans was 4.09%, down 39 basis points year on year. The outstanding loans for technology-based SMEs totaled 2.36 trillion yuan, up 472.7 billion yuan year on year, with a growth rate of 25.1%. The weighted average interest rate of the outstanding loans was 4.5%, down 39 basis points year on year.
Going forward, the PBC will work with relevant departments to implement the deployment and requirements of the CPC Central Committee and the State Council, further enrich monetary tools, develop the financial market and improve support policies, in a bid to channel more financial resources to technology-based enterprises, and provide targeted, high-quality and effective financial services for such enterprises. The focuses will be in the following areas:
First, we will increase credit services ability for the technological field. We will guide development and policy banks to focus on their main responsibilities and businesses and increase their efforts to serve the national strategy for technological innovation. We will encourage commercial banks to further increase loan extensions for technology-based enterprises. With a focus on constructing a professional risk evaluation system, we will optimize mechanisms for performance assessment and due diligence exemption, as well as improve organizational structures and product services that meet financing needs of technology-based enterprises.
Second, we will improve the direct financing ability of the multi-level capital market. In the bond market, we will further enrich bond products, enhance market cultivation and expand the issuance of bonds for technology-based enterprises. As for equity financing market, we will leverage the role of government investment funds in supporting the financing of technology-based enterprises, expand sources of funds and exit channels for venture capital and private equity investments, and strengthen middle and long-term capital supply for technology-based enterprises in their early stages.
Third, we will promote the risk-sharing role of insurance and financing guarantee institutions. Relevant departments will be encouraged to innovate business forms for guaranteeing financing for technology-based enterprises. Pilot policies will be fine-tuned regarding insurance compensation mechanisms for trial application of first major technological equipment and first batch of key new materials. The supply of technological insurance products will be enhanced to share and disperse risks in innovation and entrepreneurship.
Fourth, we will enhance the external financial support for technological innovation. We will support technology-based enterprises in raising funds through international capital markets under the prerequisite of ensuring safety and compliance. We will build a regular mechanism for responding to the financing needs of technology-based enterprises, and promote sharing of public technological information, and advance the pilot program for the financial reform of technological innovation in a steady and orderly manner.
Fifth, we will coordinate financial support of technological innovation with preventing financial risks. We will urge financial institutions to strengthen their risk management practices and promote a sound internal risk control mechanism for government investment funds. We will promote the role of the market in regulating financing of technology-based enterprises such as bond credit rating and intellectual property valuation, to avoid hasty investments and accumulated risks. Thank you.
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