China Unveils Measures to Boost Financing for Businesses

A report from Xinhua on Oct. 16th, 2024:

China will step up financing support for enterprises by incorporating quality credibility into lending decisions, said Luo Wen, head of the State Administration for Market Regulation.

Financial institutions will factor in a company’s quality management and brand reputation when evaluating loan applications, Luo said at a press conference, adding that the move is expected to improve businesses’ access to financing.

Beyond traditional loans, China will also promote the use of equities, funds and bonds to create comprehensive financing channels for companies. The initiative aims to secure an additional 300 billion yuan (42.4 billion U.S. dollars) in quality-based credit approvals annually, benefiting enterprises across various sectors, said Luo.

Luo called for efforts to provide tailored financial products and services for micro, small and medium-sized companies, including differentiated credit limits, interest rates, financing terms and repayment options.

The financing initiative is part of measures introduced at Monday’s press conference to stimulate the vitality of business entities, step up support for companies and bolster the economy.

To boost the online development of micro, small and medium-sized companies, Luo said platform enterprises are encouraged to leverage their traffic to help sellers, especially agricultural product sellers and new entrants, in enhancing brand recognition and expanding sales.

To further assist individually owned businesses, Luo said more targeted policies related to taxation, social security, employment and financing will be rolled out.

Official figures show that as of the end of August, China had registered 125 million individually owned businesses, accounting for two-thirds of the country’s total business entities.

Luo said China will also accelerate the revision of industry standards to give a boost to the large-scale equipment upgrades and trade-ins of consumer goods, which was launched this year to expand domestic demand.

Under this initiative, factories are encouraged to replace old machines with advanced new ones, and individual consumers can enjoy subsidies on automobiles and home appliances, among others.

China will upgrade technical standards for energy consumption and emission, raise product quality and safety standards, and enhance recycling standards to drive growth in equipment upgrades and consumer goods replacement, Luo added.