Na­tion’s lo­cal gov­ern­ments pledge solid sup­port for pri­vate busi­nesses

Global Times US Edition - - BIZOVE -

Au­thor­i­ties in many re­gions of China have pledged sup­port for pri­vate en­ter­prises in a bid to stim­u­late the eco­nomic growth and boost job cre­ation.

For ex­am­ple, the Bei­jing mu­nic­i­pal gov­ern­ment is of­fer­ing cus­tom­ized ser­vices to help pri­vate-sec­tor com­pa­nies ad­dress a wide ar­ray of is­sues.

Lo­cal au­thor­i­ties and pri­vate in­vestors have cre­ated a cap­i­tal pool of 35 bil­lion yuan ($5.05 bil­lion) to ease liq­uid­ity risks for listed com­pa­nies that have pledged shares as col­lat­eral for loans, Bei­jing Mayor Chen Jin­ing said in an in­ter­view, adding that the city will sup­port pri­vate com­pa­nies in is­su­ing bonds to raise funds.

Many com­pa­nies that have pledged shares face the risk of mar­gin calls if their shares de­cline, a sit­u­a­tion that forces them to pro­vide ex­tra funds to bring their mar­gin ac­counts up to main­te­nance lev­els. If they fail to do so, lenders can sell the pledged shares, trig­ger­ing fur­ther mar­ket volatil­ity.

“The city gov­ern­ment in Bei­jing will clear in­vest­ment hur­dles and open pri­vate cap­i­tal to more than 60 projects with a to­tal in­vest­ment of 100 bil­lion yuan,” Chen said.

In Shang­hai, the mu­nic­i­pal bank­ing and in­sur­ance reg­u­la­tor or­dered lo­cal lenders to op­ti­mize lend­ing poli­cies and elim­i­nate dis­crim­i­na­tory bar­ri­ers, so as to cre­ate a level play­ing field and in­crease lend­ing to pri­vate-sec­tor com­pa­nies.

The reg­u­la­tor urged the ex­pan­sion of fi­nan­cial chan­nels and pro­vi­sion of suf­fi­cient fi­nanc­ing for pri­vate com­pa­nies at dif­fer­ent growth stages.

It also called for more in­no­va­tive prod­ucts to in­crease the avail­abil­ity of loans for small and mi­cro-sized en­ter­prises, as well as reg­u­la­tion of ad­min­is­tra­tive fees and a re­duc­tion of bor­row­ing costs for the pri­vate sec­tor.

South China’s Guang­dong Prov­ince, known for its boom­ing pri­vate sec­tor, has the largest num­ber of pri­vate com­pa­nies and the high­est level of cor­po­rate tax rev­enue in China. The prov­ince an­nounced a pack­age of poli­cies to sup­port pri­vate com­pa­nies, in­clud­ing lower elec­tric­ity and gas rates for in­dus­trial use and fa­vor­able loans to small and mi­cro-sized com­pa­nies.

In the old in­dus­trial base of North­east China’s Hei­longjiang Prov­ince, lo­cal au­thor­i­ties will con­tinue to im­prove the busi­ness envi- ron­ment. Mea­sures taxes and fees, red costs, the cre­ation o field, and a crack­dow prop­erty rights vi­ola ment hur­dles.

Mea­sures like th taken af­ter the cent thor­i­ties pledged su sup­port for the priva ing tax cuts and easi

The pri­vate secto por­tant role in the trib­ut­ing more than tax rev­enue, 60 per per­cent of tech­nolog 80 per­cent of urb and 90 per­cent of n com­pa­nies.

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