Looking at the economy on the front line | Looking at the economy from the "new" to the "green" with a focus on blood transfusion and gas to raise confidence-perspective on bank credit trends Xinhua News Agency | Economic Reference News | Perspective
Beijing, August 10th (Xinhua) - The Economic Reference Daily published an article on August 10th titled "Focusing on Blood and Gas Infusion to Boost Confidence and Promote Green Development in the New Era - Insight into the Trends of Bank Credit Investment". The article states that finance is the lifeblood of economic development. In the first half of this year, China's RMB loans increased by 15.73 trillion yuan, an increase of 2.02 trillion yuan year-on-year. Several banks have recently held intensive mid year work meetings to deploy their work for the second half of the year, pointing out that they will further increase their credit lending efforts and continue to focus on key areas and weak links.
What are the key points of current bank credit allocation? What measures can better add confidence to business entities? The reporter recently interviewed multiple financial institutions and enterprises.
In August, in Yongchun County, Quanzhou, known as the "hometown of Chinese citrus", the sunshine shines on the mountains, and tender green fruits hang on the branches. Yongchun County has an annual production of about 250000 tons of citrus fruits, many of which are still hanging on trees before they mature and have been fully booked by domestic and overseas merchants.
Fujian Yongchun Jufu Fruit Co., Ltd. is an enterprise specializing in the cultivation and sales of citrus fruits. The production cycle of citrus is long, and there is often a shortage of funds due to the high initial cost investment in planting. "When we learned that Jufu Fruit had such difficulties, we handled 'company+farmer' loans and mortgage e-loans for it, which solved the top problem of the company's development," said Liu Caihua, manager of Rural Revitalization Finance Department of Yongchun County Branch of Agricultural Bank of China.
According to Chen Changbiao, the President of the Yongchun County Branch of Agricultural Bank of China, Yongchun Agricultural Bank has customized service plans tailored to each household based on in-depth understanding of the company's business premises, production scale, cycle characteristics, and funding needs. It has also launched multiple personalized credit products such as small and micro enterprise smart loans, mortgage e-loans, and "micro Jie loans".
Tailoring banks to support inclusive small and micro enterprises is one of the powerful footnotes of financial support for the real economy. At the end of June this year, the balance of inclusive small and micro loans increased by 26.1% year-on-year, 14.8 percentage points higher than the growth rate of various loans; The number of inclusive small and micro credit households was 59.35 million, close to 60 million, a year-on-year increase of 13.3%.
In addition to the inclusive small and micro sectors, areas such as technological innovation and green development are also top priorities for bank credit investment.
"The previous loan from ICBC expired at the end of August, and a new three-year loan of about 10 million yuan will be extended immediately, with a longer term and more favorable interest rates," said Zhang Hui, CEO of Beijing Haoshuo Technology Co., Ltd.
Beijing Haoshuo Technology Co., Ltd. is a medical consumables management enterprise that integrates independent production, sales, and agency distribution. It is a "specialized, refined, unique, and new" small and medium-sized enterprise and a national high-tech enterprise in Beijing. Zhang Huitan said that although the economy is recovering, the overall market demand has not yet returned to pre pandemic levels, and the company's capital turnover speed is still slow, external funding support is even more needed. "ICBC's loans are very important to us, as they can further stabilize our cash flow and give us more confidence to continue expanding," she said.
Under policy guidance, banks attach great importance to high-tech enterprises and "specialized, refined, unique, and new" small and medium-sized enterprises, and have also come up with many practical solutions to solve their financing difficulties based on their own characteristics.
Su Yiping, President of the Beijing Fangzhuang Branch of Industrial and Commercial Bank of China, said that many start-up high-tech enterprises operate with light assets, and the bank's past rating models are not highly compatible with such enterprises. Therefore, Industrial and Commercial Bank of China has launched specialized, refined, and new credit e-loans and other characteristic products to effectively solve the problem of traditional rating. At the same time, relying on national policy support, it further reduces financing costs and supports enterprise development.
Su Yiping also stated that there was an information gap between banks and science and technology innovation enterprises in the past. Some science and technology innovation enterprises relied more on equity financing and had less knowledge about the latest loan products of banks. "We have also further introduced our policies to enterprises through platforms such as the Financial Bureau and the Federation of Industry and Commerce, and our understanding of banks is deepening," he said. According to him, by the end of the first half of this year, the balance of national high-tech enterprise loans at Fangzhuang Branch had increased by more than 60% compared to the end of last year.
It is worth noting that the People's Bank of China's structural monetary policy tools have played an important guiding role in guiding the flow of funds into key areas and weak links.
Zhangzhou Huaneng Gulei Thermal Power Plant undertakes the mission of providing centralized heating for Gulei Port Economic Development Zone, one of the seven major petrochemical bases in China. It is currently in the construction phase and has significant funding needs in equipment procurement, civil construction, and other aspects.
"In order to ensure the smooth progress of engineering construction, we have granted a credit of 800 million yuan to this project, which is currently being disbursed in batches. Based on the low-cost funds of the People's Bank of China's special re loan for clean and efficient utilization of coal, the project interest rate is at a relatively low level." The project account manager of China Development Bank Fujian Branch explained that due to the LPR decline again this year, the loan interest rate recently disbursed in batches has been lower, which is undoubtedly a "shot in the arm" for enterprises and effectively guarantees the smooth construction of the project. Data shows that the Fujian Branch of China Development Bank has utilized the People's Bank of China's special re loan for clean and efficient utilization of coal, and has issued a total of 1.35 billion yuan of preferential interest rate loans to key coal-fired enterprises in the province, helping to reduce costs and increase efficiency in financing for coal-fired enterprises.
Zou Lan, Director of the Monetary Policy Department of the People's Bank of China, recently stated that as of the end of June 2023, the balance of structural monetary policy instruments was approximately 6.9 trillion yuan. Among them, the balance of re loans and rediscounts supporting inclusive finance for agriculture and small businesses is approximately 2.6 trillion yuan, which is basically the same as the end of the previous year; The balance supporting green, low-carbon, technological innovation and other fields is approximately 1.2 trillion yuan, an increase of 516.6 billion yuan from the end of last year. He also said, "If necessary, new tools can be created to continuously support key areas and weak links such as inclusive finance and green low-carbon."
In August, many banks have been accelerating the deployment of future work and clearly increasing their support for key areas such as enterprises, with private enterprises, manufacturing, and technological innovation remaining the top priorities of support. China CITIC Bank has recently formulated the "CITIC Bank Financial Support for the Development and Growth of Private Economy Action Plan", proposing 26 work measures with broad coverage and strong targeting; Agricultural Bank of China proposes to strongly support manufacturing and technological innovation, assist in the construction of modern industrial systems, and achieve high-level technological self-reliance and self-improvement.
"In the second half of the year, we will continue to support the development of inclusive, manufacturing, and private enterprises, and the amount of related credit investment will also continue to expand. Su Yiping also stated that in order to better meet the needs of enterprises, further enhance the stickiness with corporate customers, the branch will fully leverage the advantages of ICBC's cluster, provide comprehensive financing solutions such as investment banking for customer providers, and provide better blood and gas for enterprises.".
