The question of Bloomberg is addressed to the People's Bank of China. I'll give floor to Mr. Chen.
To ease the financing difficulty and high cost of financing of small and medium-sized micro enterprises and private enterprises is an important task of our financial supply-side structural reform, and also the focus of the work of the People's Bank of China all the time. Traditional services and the labor-intensive manufacturing are two worst hit industries since the outbreak of the epidemic. Most of these industries are micro, small and medium-sized enterprises. Therefore, the financial departments giving full support for micro, small and medium-sized enterprises to get through the crisis matters the overall situation of epidemic prevention and control, work and production resumption, employment, and economic recovery. On Feb.1, the five departments, including the People's Bank of China, jointly issued 30 measures, many of them are aimed at supporting micro, small and medium-sized enterprises. The measures required financial institutions to increase credit supply for micro, small and medium-sized enterprises, and should not blindly withdraw, rescind or delay loans. At the same time, these micro, small and medium-sized enterprises who are facing difficulties in repayment can be granted a roll-over and renewal of the loan. In the list of targeted companies with 300 billion re-lending fund, most are micro, small and medium-sized enterprises.
For the next step, the financial support for micro, small and medium-sized enterprises is mainly showed in the following aspects:
First, we should support commercial banks with sufficient fund to issue loans to micro, small and medium-sized enterprises. In addition to the aforementioned monetary policy tools including targeted cuts to required reserve ratios, supply to meet the needs of agriculture, relending of support small enterprises, and re-discounts, etc., we must strengthen the issuance of financial special bonds to help ensure commercial bank have sufficient funding.
Second, there is a need to support the three policy banks to increase their credit support for small, medium and micro enterprises in the production chain such as manufacturing, foreign trade, spring ploughing and live pig production.
Third, for these micro, small and medium-sized enterprises that have been hard hit by the epidemic, if overdue loans occur during a period of time, the overdue loans can not be reported, and can be given preferential support in the risk-based loan classification.
Fourth, we should guide commercial banks to make full use of the available financial technology with first-mover advantages to comprehensively improve their capacity of risk identification and risk management to decrease the possibility of a rise in non-performing loans. However, it should be pointed out that the average ratio of non-performing loans in China's commercial banks was only 1.86% in 2019, and, although the ratio for micro, small and medium-sized enterprises is slightly higher than the average level, it remains far below the regulatory standard of 5%. In addition, China's commercial banks' provision coverage ratio stands above 180%, so they also have sufficient resources and capabilities to deal with the impact of the epidemic on micro, small and medium-sized enterprises and the national economy. Thank you.