28th November 2023 – (Beijing) In a recent monetary policy report for Q3, the People’s Bank of China (PBOC) announced an initiative to enhance financial support for private entities and reduce their comprehensive financing costs. The central bank’s move signals China’s increasing focus on bolstering private micro, small, and medium-sized enterprises (MSMEs).
The PBOC’s latest strategy involves amplifying the tilt of monetary policy support towards private MSMEs. The central bank’s efforts have already yielded positive results, as evidenced by measures including the issuing of special financial bonds by commercial banks specifically for micro and small businesses. The report also sheds light on how the central bank has supported the financing of private MSMEs within the supply chain.
The report revealed that by the end of September, the inclusive loan support facility in China had allocated incentive funds worth CNY 52.6 billion (approximately USD 7.4 billion) to micro and small businesses. This figure represents an increase of CNY 25.1 billion from the start of the year.
Moreover, loans to small and medium-sized sci-tech enterprises stood at CNY 2.4 trillion by the end of September, reflecting a year-on-year increase of 22.6%. This significant growth underlines China’s commitment to propelling technological innovation and developing its sci-tech industry.
Beyond immediate monetary policy, the PBOC has pledged to introduce systematic arrangements for financial support to the private sector. The bank emphasised that these measures aim to align financial backing for the private economy with the sector’s contribution to China’s economic and social development.