Shanghai acts to help businesses in bid to stabilize city’s economy

SHANGHAI has launched 18 key measures to improve financial support for business, reduce corporate funding costs and stabilize the local economy.

The Guiding Opinions were formulated by the Shanghai headquarters of the People’s Bank of China, together with the Shanghai Bureau of the China Banking and Insurance Regulatory Commission, the Shanghai Financial Regulatory Bureau, the Shanghai Commission of Economy and Informatization and several other departments.

Measures include increasing monetary policy incentives, strengthening direct and indirect financing, reducing the financing costs of small and micro enterprises and cutting taxes and fees for businesses.

About 12 billion yuan (US$1.69 billion) of bailout loans will be budgeted for enterprises and cooperation between local governments and banks will be deepened.

The Shanghai Pudong Development Bank, the Bank of Shanghai and Shanghai Rural Commercial Bank are encouraged to grant preferential loans to qualified enterprises.

And interest shall be reduced by at least 25 basis points from the prime rate during the same period.

The prime rate was introduced by the central bank in August, 2019 and is the only benchmark rate for banks’ new lending.

Lenders and their clients can negotiate a floating rate higher or lower than the benchmark.

Financial institutions are encouraged to set up loan renewal service centers, and increase the loan renewal ratio of small business.

The Guiding Opinions also emphasize increasing support in key areas.

These include foreign trade and giving full play to the role of insurance guarantees.