Expert on Policy Benefits for the Development of Private Economy: Guiding More Financial Resources to Flow towards Small and Medium sized Banks in Private Economy | Economy | Resources
The private economy is an important achievement of the development of socialist market economy, and an important force in promoting economic and social development. It plays an irreplaceable role in stabilizing growth, promoting innovation, increasing employment, and improving people's livelihoods. Supporting the development of the private economy is the responsibility of the financial sector.
Since July this year, relevant national departments have introduced a series of financial measures to support the development of the private economy. The Opinion of the Central Committee of the Communist Party of China and the State Council on Promoting the Development and Growth of the Private Economy clarifies the need to improve the financing support policy system; The People's Bank of China and the State Administration of Foreign Exchange held a work conference for the second half of 2023, calling for the effective optimization of the financing environment for private enterprises; The People's Bank of China held a symposium on financial support for the development of private enterprises, studying measures to strengthen financial support for private enterprises
At the symposium on financial support for the development of private enterprises, Pan Gongsheng, Secretary of the Party Committee and President of the People's Bank of China, stated that the People's Bank of China will accurately and effectively implement a prudent monetary policy, maintain reasonable and sufficient liquidity, strengthen coordination and cooperation among financial, fiscal, and industrial policies, and guide more financial resources to flow into the private economy. Develop and issue guiding documents on financial support for private enterprises, promote commercial banks to optimize their internal control management systems, do a good job in policy promotion and interpretation, and strengthen the promotion of typical experiences. Support local governments to proactively solve the problem of outstanding corporate accounts. Promote the expansion and increment of private enterprise bond financing support tools, and strengthen financial market support for the development of private enterprises.
Experts say that the above series of measures will help further stabilize the confidence and expectations of private enterprises and entrepreneurs, promote the healthy development of the private economy, and make new and greater contributions to serving China's economic recovery and high-quality development, and achieving common prosperity.
"Financial support plays an irreplaceable role in promoting the development of private enterprises." Dong Ximiao, Chief Researcher of Zhaolian Finance, said in an interview with People's Daily that the next step should continue to take measures from credit support, direct financing, and credit enhancement systems to further solve the financing difficulties of private enterprises and create a better financial environment for their reform and development. Among them, the banking industry should play a major role and increase credit support. On the one hand, we will further optimize the banking institutional system, vigorously develop small and medium-sized banks such as private banks and community banks, and promote small and medium-sized banks to have the ability and willingness to better serve private enterprises. On the other hand, regardless of the size of the bank, while meeting the demand for private enterprises to renew loans, it should actively solve the problem of "difficulty in first loan" and increase the proportion of credit loans under controllable risks.
Some analysts believe that to support the development of the private economy, it is necessary to increase the proportion of direct financing in the financing of private enterprises. Relevant departments need to further improve the stock issuance and refinancing system, improve the efficiency of IPO and refinancing review for private enterprises, unleash the vitality of market mechanisms, and enhance the ability of private enterprises to raise funds in the capital market.
According to Lou Feipeng, a researcher at Postal Savings Bank of China, private enterprises themselves have a large number and are distributed in different industries and at different stages of growth. They have a great demand for financing through the capital market and need to effectively leverage the potential of the capital market to provide long-term funding to support the development of private enterprises.
In addition, in response to the problem of difficult and expensive financing for private enterprises, Dong Ximiao believes that financial institutions should further optimize their credit enhancement system and risk sharing and compensation mechanisms in the process of supporting the development of the private economy. Establish and improve a shared responsibility and loss sharing mechanism among enterprises, banks, and governments, establish a risk compensation fund for private enterprises, change the current situation of lack of information, credit reporting, and guarantees in private enterprises, and gradually reduce guarantee rates.
The reporter summarized that in recent years, the People's Bank of China has introduced a series of policy measures and worked together with financial institutions to promote the continuous increase, expansion, and price reduction of financing for private enterprises, fully promoting the growth, optimization, and strength of the private economy. Data shows that as of the end of June 2023, the balance of inclusive small and micro loans was 27.7 trillion yuan, a year-on-year increase of 26%. The number of inclusive small and micro credit households was 59.35 million, a year-on-year increase of 13.3%. Since the expansion of private enterprise bond financing support tools in November 2022, a total of 28.4 billion yuan of bonds have been issued to support private enterprises.
