From China's "25 Articles of Private Economy", we will see three major changes in the financing of private enterprises in the future
China News Service, Beijing, November 11 -- The "27 Articles of the Private Economy" have been officially implemented. In order to continue to strengthen the financial services of private enterprises, the Central Bank of China and other eight departments jointly issued the "Notice on Strengthening Financial Support Measures to Help the Development and Growth of the Private Economy" (hereinafter referred to as the "Notice") on the 25th, proposing 27 specific measures to support the private economy.
After the release of the "Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting the Development and Growth of the Private Economy", relevant ministries and local governments have successively introduced a package of policy measures in response to the pain points and difficulties of private enterprises. The notice continues the previous policy tone and makes precise efforts to support the financing support policies of private enterprises. Against this backdrop, three major changes are expected in the future.
First, there is a clear goal of serving private enterprises. Judging from the content of the notice, in terms of the total amount, by formulating the annual service targets of private enterprises and increasing the weight of the relevant businesses serving private enterprises in the performance appraisal, we will increase financial support for private enterprises and gradually increase the proportion of loans to private enterprises.
Zhang Wenlang, chief macro analyst and managing director of the research department of CICC, said that the notice requires financial institutions to set service targets for private enterprises, gradually increase the proportion of loans to private enterprises, and require financial institutions to increase the performance appraisal requirements for serving private enterprises, which is conducive to promoting financial institutions to strengthen services to private enterprises from the incentive mechanism.
Wang Zhengguo, co-head of the research service department of the fixed income department of CITIC Securities, said bluntly that the notice requires the formulation of annual targets for financial institutions to serve private enterprises, which enhances the weight of support for private enterprises in performance appraisal, and can effectively enhance the service awareness and support of finance for the private economy.
The second is to smooth financing channels from all directions. "In terms of financing channels, the notice proposes a series of targeted measures to support the financing of private enterprises from three ways: loans, bonds and equity." Wang Zhengguo said.
The circular stresses that it is necessary to proceed from the characteristics of the financing needs of private enterprises and strive to unblock diversified financing channels such as credit, bonds, and equity. In terms of loans, the circular calls for the implementation of monetary policy tools such as re-lending and re-discounting, and continuing to increase credit to private enterprises.
In terms of bonds, we will promote the expansion and efficiency of bond financing support tools for private enterprises, expand the scale of bond financing for private enterprises, encourage and guide institutional investors to increase the allocation of private enterprise bonds, and propose to explore the development of high-yield bond markets.
In terms of equity, it supports the listing and refinancing of private enterprises, clearly points out that it supports private enterprises to go public overseas, supports mergers and acquisitions of private enterprises, promotes regional equity markets, and highlights the positioning of the private equity market. In addition, the circular also puts forward specific requirements for improving the bill market, confirming the rights of accounts receivable, and strengthening financing guarantees.
Zhang Wenlang said that the circular also proposed to make good use of both international and domestic resources. It is necessary not only to support the "introduction of foreign investment", improve the facilitation policies for cross-border investment and capital accounts, expand the cross-border financing of high-tech and specialized, special and new small and medium-sized enterprises and the domestic reinvestment of foreign-funded enterprises, but also to help "go global", support private enterprises to carry out pilot projects of domestic and foreign currency capital pools of multinational companies, encourage financial institutions to carry out cross-border RMB first loan account expansion actions, and provide high-quality private enterprises with trade foreign exchange payment facilitation services.
Third, the enthusiasm of financial institutions in providing services should be enhanced. The circular proposes that it is necessary to comprehensively use monetary policy tools, financial incentives and subsidies, insurance protection and other measures to enhance the enthusiasm of financial institutions in serving the private economy.
Xiao Chengzhe, chief analyst of fixed income at Bank of China International Securities, said that the private economy of financial services has been proposed for many years and has made certain achievements.
On the one hand, we will continue to promote and deepen the previously effective structural monetary policy, continue to increase the re-lending and rediscount quota for supporting agriculture and small enterprises, and extend and optimize the support tools for inclusive small and micro loans, so as to promote the continuous growth of financing scale and the continuous reduction of financing costs in related fields. On the other hand, we will actively broaden the sources of funds for banks and financial institutions, help financial institutions stabilize their liabilities, consolidate their capital strength, and then improve their ability to serve entities.
Wang Zhengguo said that in order to achieve the above-mentioned policy goals, it is also necessary to fully mobilize the enthusiasm of all parties and give full play to the joint efforts of the four parties. The Federation of Industry and Commerce plays an important role as a bridge between private enterprises, financial management departments and financial institutions. The notice emphasizes that cooperation and docking should be deepened, and the Federation of Industry and Commerce will timely push the list of high-quality private enterprises with market, efficiency and good credit to financial institutions, establish and improve the normalized communication and cooperation mechanism between financial management departments, financial institutions and the Federation of Industry and Commerce system, and strengthen policy support such as positive guidance and information sharing, so as to efficiently meet the financing and financial needs of private enterprises. (ENDS)