The report said that small and medium-sized enterprises are hard to get loans because first, an oversupply of products is found. Secondly, enterprises' social credit is not good. Thirdly, banking service for small and medium-sized enterprises is not perfect. Fourthly, commercial banks' system should be upgraded. Fifthly, banking service at county level is still very weak.

The central bank will issue a guideline for supporting small and medium-sized enterprises to get loans lately to perfect loan system.

The reports said that there are several reasons for current price reduction, first, technology upgrading factor, second, influence of China's WTO entry, third, wider income gap. Generally, it is chiefly because of overproduction and a slowdown in market demand.

The report pointed out that banking institutions hold a large amount of low-interest rate T bonds and this is regarded as risky.

The report also said that monetary policy should support development of real estates, but it should also prevent bubble in this area especially a surplus of high-grade housing.

Individual house mortgage loans should be encouraged, but the policy should prevent over-concentration of real estates loans in order to prevent financial risk.

( People's Daily August 2, 2002)