China reiterates financial support for small firms

CHINA - China will make more efforts to tackle the financing difficulties of small and micro-sized businesses as part of a broader campaign to bolster the real economy. An executive meeting of the State Council chaired by Premier Li Keqiang on yesterday called for effective implementation of government policies designed to facilitate easier and less costly capital-raising for small and microsized firms, eyeing a supportive financial sector to help ensure stable employment and strong business activity. “China will maintain a prudent monetary policy, rather than resort to a deluge of strong stimulus policies”, according to a statement released after the meeting. Financial institutions are encouraged to increase loans to money-hungry small businesses. Microlending will be linked to performance appraisal of lenders, and the banking regulator will more tolerant of moderate increases in loan-todeposit ratios. Lenders should shorten approval procedures for loans and have more longterm lending agreements, as well as make reasonable lending terms and ways of repayment. High-yield and private placement bonds and asset-backed securities will be supported. Loans will be tax deductible for small firms. While encouraging microlending, the document also stressed risk prevention and plans to set up a special regulatory gauge for loans to small and micro-sized businesses.

(Xinhua)