New poli­cies will help small firms’ fi­nanc­ing

China Daily (USA) - - TOP NEWS - By ZHANG YUE and HU YONGQI

in­tro­duced­more Wed­nes­day,by New “We Pre­mier fi­nan­cial poli­cies­must Li to solve presided Ke­qiang. sup­port en­cour­ageare fi­nanc­ingto over­for be small dif­fi­cul­tiesand mi­crobusi­nesses.for small and

mi­crobusi­ness­esThey will in­cludeas part more of di­ver­si­fiedour ef­forts to fi­nanc­ing­sup­port the chan­nels, real econ­omy,”more loan­sLi said. dis­cre­tion “Such for ef­forts lo­cal will banks, fur­therand a un­leash­bet­ter-de­vel­oped eco­nomic credit vi­tal­ity ratin­gand cre­atesys­tem more na­tion­”

The The new mea­sures mea­sures wereare a ap­prove­drevi­sion of at the the ex­ist­ingS­tate Coun­cil’s pol­icy of en­cour­agin­gex­ec­u­tive meet­ing sup­port on for Wed­nes­day,small and presided mi­crobusi­nesses,over by Premier­which was in­tro­duced Li Ke­qiang. in2013.

“We must solve fi­nanc­ing dif­fi­cul­ties for small and mi­crobusi­nesses as part of SOUTH CHINA SEA our ef­forts to sup­port the real econ­omy,” Li said. “Such ef­forts will fur­ther un­leash eco­nomic vi­tal­ity and cre­ate more jobs.”

The new mea­sures are a By WANGXU re­vi­sion of the ex­ist­ing pol­icy wangxu@chi­ en­cour­ag­ing sup­port for small and mi­crobusi­nesses, which was in­tro­duced in 2013.

Lo­cal banks, once they qual­ify, will have dis­cre­tion on fi­nanc­ing small and mi­crobusi­nesses. Fi­nan­cial in­sti­tu­tions will not be

Pre­mier Li Ke­qiang

al­lowed­such el­i­gi­ble­and in­ap­pro­pri­ate­busi­ness­es­for to cut re­newed fi­nanc­ingth­at­fees loans,willare­for be mi­crobusi­nesses.scrapped for small and

fi­nan­cialMore so­cial in­no­va­tion­funds and will be en­cour­aged to sup­port the devel­op­ment of such busi­nesses.con­sis­tent fo­cus by ev­ery­body, “Fi­nanc­ing in­clud­ing dif­fi­cul­tythe Chi­ne­se­for small for­eign and min­is­ter, mi­crobusi­ness­es­dur­ing this is week’sa chal­lenge ASEAN For­eign Min­is­ters’that must be taken Meet­ing­care of,” Li in said Vi­en­tiane,at the meet­ing.Laos, on turn­ing“It is not the on Yet past we con­fronta­tions.should not stop our ef­forts Yasay just told be­causea sep­a­ra­teof such news risks. con­fer­ence What ear­lier must in be the done day, must “The be le­gal done.” ba­sis for us to­move

The new mea­sures come as the na­tion’s pri­vate busi­ness growth slows. Pri­vate in­vest­ment, mostly from small and mi­crobusi­nesses, con­trib­utes more than 60 per­cent of China’s fixed as­set in­vest­ment and sup­ports em­ploy­ment for more than 80 per­cent of the work­force.

But this in­vest­ment grew by just 2.8 per­cent in the first six months of this year. A na­tion­wide re­view by the cen­tral gov­ern­ment found that the most com­mon rea­son was that small and mi­crobusi­nesses faced in­creas­ing dif­fi­cul­ties in ob­tain­ing loans from banks, hin­der­ing their in­vest­ment abil­ity.

Li Zibin, pres­i­dent of the China As­so­ci­a­tion of Small and Medium-Sized En­ter­prises, said at Wed­nes­day’s meet­ing that fi­nanc­ing dif­fi­cul­ties re­main the top chal­lenge and the big­gest con­straint for the devel­op­ment of small and mi­crobusi­nesses, al­though the cen­tral gov­ern­ment has made tre­men­dous ef­forts to sup­port them.

Pre­mier Li said: “Ad­e­quate fi­nanc­ing for such busi­nesses is a com­mon chal­lenge glob­ally. All gov­ern­ment de­part­ments con­cerned should take con­crete mea­sures to sup­port the healthy devel­op­ment of small and mi­crobusi­nesses. This, in turn, is an ef­fec­tive way to pro­tect the fi­nan­cial sec­tor from such risks.”

Guo Tiany­ong, a pro­fes­sor of fi­nance at Cen­tral Univer­sity of Fi­nance and Eco­nom­ics, said: “Tra­di­tion­ally, fi­nan­cial in­sti­tu­tions are re­luc­tant to grant loans to small and mi­crobusi­nesses. How­ever, fi­nanc­ing dif­fi­cul­ties have hin­dered pri­vate in­vest­ment and such busi­nesses dur­ing the first half of this year, and so fa­vor­able poli­cies should be granted to them.”

But im­ple­ment­ing th­ese poli­cies is a long process and pos­i­tive im­pacts will be seen when small and mi­crobusi­nesses con­tinue to get sup­port from fi­nan­cial in­sti­tu­tions, Guo added.

Fi­nanc­ing dif­fi­culty for small and mi­crobusi­nesses is a chal­lenge.”

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