On November 27th, the People's Bank of China, in collaboration with eight other departments, issued the "Notice on Strengthening Financial Support Measures to Promote the Development and Growth of Private Economy" (hereinafter referred to as the "Notice"). The notice supports private enterprises in registering and issuing innovation-related promissory notes, innovation bonds, equity-debt hybrid products, green bonds, carbon-neutral bonds, transformation bonds, etc., to meet the funding needs of private enterprises in the fields of technological innovation and green, low-carbon development.
The "Notice" specifies the goals and priorities of financial services for private enterprises. Structurally, it increases support for key areas such as technological innovation, "specialization and novelty," green and low-carbon initiatives, and the reconstruction of industrial foundations, as well as for small and medium-sized private enterprises.
The "Notice" emphasizes the need to understand the financing characteristics of private enterprises and focuses on smoothing diverse financing channels such as credit, bonds, and equity. Banking and financial institutions should increase support for initial loans and credit loans, actively engage in industry chain supply chain financial services, proactively provide follow-up funding services to private enterprises, avoid blindly suspending, suppressing, withdrawing, or cutting off loans, and simultaneously promote development and prevent risks.
The following is the original content：
In order to thoroughly implement the spirit of the 19th National Congress of the Communist Party of China and the requirements of the Central Financial Work Conference, and comprehensively implement the "Opinions of the CPC Central Committee and the State Council on Promoting the Development and Growth of the Private Economy," adhering to the unwavering commitment to the "two unwaverings," guiding financial institutions to establish an ethos of impartiality, and continuously strengthening financial services for private enterprises, the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, and the All-China Federation of Industry and Commerce recently jointly issued the "Notice on Strengthening Financial Support Measures to Promote the Development and Growth of the Private Economy." This document puts forth 25 specific measures to support the development of the private economy.
Section One: Sustained Increase in Credit Resources to Support the Development and Growth of Private Economy
1. Clearly Define Targets and Priorities for Financial Services to Private Enterprises:
- Financial institutions should establish annual service goals for private enterprises, increasing the weight of services to private enterprises in performance assessments.
- Enhance financial support for private enterprises, gradually increasing the proportion of loans to private enterprises.
- Develop organizational structures and product services that cater to the financing needs of private enterprises, especially in key areas such as technological innovation, green and low-carbon initiatives, and industrial base reconstruction.
2. Increase Support for Initial Loans and Credit Loans:
- Actively cultivate first-time loan customers, collaborating with relevant government departments and industry associations to identify quality private enterprises.
- Strengthen support for credit loans, exploring technology-enabled credit financing products tailored for private enterprises.
3. Actively Engage in Industry Chain Supply Chain Financial Services:
- Explore supply chain models that support small and medium-sized private enterprises in the supply chain.
- Enhance the functionality of receivables financing service platforms, promoting the development of standardized supply chain bills.
- Implement financing initiatives for small and medium-sized private enterprises along key industrial chains.
4. Proactively Provide Follow-up Funding Services:
- Encourage lead banks and syndicate loan lead banks to proactively engage with private enterprises facing temporary difficulties but with marketable products and promising projects.
- Avoid indiscriminate suspension, pressure, withdrawal, or discontinuation of loans.
- Implement policies related to real estate market stability and ensure stability in key financing channels.
5. Effectively Balance Development and Risk Prevention:
- Enhance the sustainability of services to private enterprises while ensuring lawful and prudent operations.
- Strengthen credit risk control mechanisms and monitor fund flows rigorously.
- Improve management of related-party transactions, enhancing the ability to identify and monitor such transactions.
Section Two: Deepen the Construction of the Bond Market System to Facilitate Bond Financing Channels for Private Enterprises
6. Expand the Scale of Private Enterprise Bond Financing:
Support the registration and issuance of sci-tech promissory notes, sci-tech bonds, equity-debt hybrid products, green bonds, carbon-neutral bonds, transformation bonds, etc., to further meet the funding needs of private enterprises in areas such as technological innovation and green, low-carbon initiatives.
Support private enterprises in issuing asset-backed securities to revitalize existing assets. Optimize the registration mechanism for debt financing tools for private enterprises, implementing a "fast track" for the entire registration process, supporting shelf registration and issuance, and improving the convenience of financing services.
7. Leverage Bond Financing Support Tools for Private Enterprises:
- Encourage institutions such as China Chengxin Credit Enhancement Investment Co., Ltd., and China Securities Finance Corporation to expand their role in supporting private enterprise bond financing, using methods like credit enhancement and risk mitigation tools.
8. Increase Investment in Private Enterprise Bonds:
- Encourage institutions like commercial banks, insurance companies, pension funds, and mutual funds to strategically allocate funds to private enterprise bonds.
- Support private enterprises in repurchasing debt financing instruments issued by them in a market-oriented manner.
9. Explore the Development of the High-Yield Bond Market:
- Research and advance the construction of the high-yield bond market, catering to the financing needs of technology-based small and medium enterprises.
- Develop a specialized platform for high-yield bonds and design trading mechanisms suitable for high-yield characteristics, fostering professional investor growth and improving market liquidity.
Section Three: Enhance the Role of the Multi-Level Capital Market to Expand the Scale of High-Quality Private Enterprise Equity Financing
10. Support Private Enterprise Listing Financing and Mergers and Acquisitions:
- Promote deeper implementation of the registration system reform, actively supporting private enterprises in issuing IPOs and subsequent refinancing.
- Support qualified private enterprises in overseas listings and leverage the advantages of dual markets.
- Continue to deepen market-oriented reforms in mergers and acquisitions, optimizing the "small and fast" review mechanism and supporting private enterprises in enhancing quality and efficiency through mergers and acquisitions.
11. Strengthen Regional Equity Market Support for Private Enterprises:
- Promote the development of regional equity markets with a focus on private equity markets.
- Expand innovative business pilot programs such as private equity fund share transfers and comprehensive subscription rights.
- Increase the enthusiasm of private equity funds, securities service agencies, and other institutions to participate in regional equity markets.
12. Leverage Equity Investment Funds to Support Private Enterprise Financing:
- Utilize government funds to guide more social capital toward key industries and critical areas in private enterprises.
- Cultivate early investment forces such as angel investment and venture capital, increasing investment in early-stage small and medium-sized private enterprises.
- Improve the investment exit mechanism, optimizing arrangements for the lock-up period and investment period of venture capital funds.
Section Four: Increase Forex Facilitation Policies and Service Supply to Support Private Enterprises' "Go Global" and "Bring In" Initiatives
13. Improve the Level of Convenience in Current Account Receipts and Payments:
- Encourage financial institutions to initiate actions to expand the use of the offshore renminbi "first account."
- Support financial institutions in providing trade forex services that facilitate the receipt and payment of funds for more high-quality private enterprises, enhancing cross-border settlement efficiency.
- Support financial institutions in utilizing current and foreign exchange settlement policies for cross-border e-commerce and other new trade formats.
14. Optimize Cross-Border Investment and Financing Facilitation Policies:
- Optimize forex account and capital project fund usage management, improve capital project income payment and forex settlement facilitation policies, and support eligible financial institutions in providing digital services for capital projects.
- Expand the pilot scope of cross-border financing facilitation for high-tech and "specialized and new" small and medium enterprises.
- Support eligible private enterprises in conducting pilot projects for integrated fund pool business in both domestic and foreign currencies, facilitating the transfer and use of funds.
15. Enhance Specialized Forex Financial Services Across Borders:
- Encourage financial institutions to improve their exchange rate risk management service systems and mechanisms, strengthen government-bank-enterprise collaborative efforts, and reduce forex hedging costs for small and medium-sized private enterprises.
- Innovate continually in the application scenarios of cross-border financial service platforms, providing online and convenient financing and settlement services for private enterprises.
Section Five: Strengthen Positive Incentives to Enhance Financial Institutions' Enthusiasm in Serving the Private Economy
16. Increase Support for Monetary Policy Tools:
- Continue to implement various monetary policy tools, supporting financial institutions in increasing credit allocation to key areas of private enterprises.
- Use agricultural and small business re-lending quotas effectively, transmitting preferential interest rates to private small and micro enterprises, reducing their financing costs.
17. Strengthen Financial Rewards and Subsidies:
- Optimize entrepreneurial guarantee loan policies, simplify application processes, and promote online business models.
- Activate the insurance compensation mechanism for the first application of insurance for major technological equipment and the first application of insurance for the first batch of applications for key new materials.
18. Broaden Financial Institutions' Funding Sources:
- Support financial institutions in issuing financial bonds, raising funds for lending to private enterprises.
- For financial institutions that strongly support private enterprises, prioritize issuing various capital instruments to supplement capital under conditions that meet issuance requirements.
Section Six: Optimize Financing Support Policies to Enhance the Financial Capacity of the Private Economy
19. Improve Credit Incentive and Constraint Mechanisms:
- Enhance the sharing mechanism of credit information for private enterprises, perfecting credit ratings and evaluation systems for small and micro enterprises.
- Facilitate access for banks to inquire about credit information related to enterprises from authorities such as water, electricity, industry and
commerce, tax, and government subsidies, under the premise of legal compliance, easing information asymmetry.
- Establish mechanisms for credit restoration after rectification of dishonest behavior.
20. Strengthen Risk Sharing and Compensation Mechanisms:
- Utilize the leading role of the National Financing Guarantee Fund system, stabilize the scale of re-guarantee business, guide government financing guarantee agencies at all levels to reasonably determine guarantee rates, actively cultivate "first guarantors" for private enterprises, and increase support for credit enhancement to small and micro private enterprises.
- Establish a national financing guarantee fund risk compensation mechanism, encourage localities with conditions to improve the capital replenishment and risk compensation mechanisms of government financing guarantee agencies, further enhancing the credit enhancement and risk-sharing role of government financing guarantee agencies.
21. Improve Credit Constraint Mechanisms in the Bill Market:
- Support private enterprises in using bills more conveniently for financing.
- Strengthen protection for private enterprises using bills, restricting businesses with continuous overdue bills from conducting bill transactions to prevent overdue accounts for private enterprises.
- Guide bill market infrastructure to optimize system functions, facilitate enterprise access to bill information disclosure results, and more effectively identify and assess related credit risks.
22. Strengthen Receivables Confirmation for Accounts Receivable:
- Encourage payment entities such as government agencies, institutions, and large enterprises to promptly confirm creditor-debtor relationships after receiving requests for confirmation from small and medium-sized enterprises.
- Urge local governments to actively take various measures to enhance accounts receivable confirmation efforts for small and micro enterprises in their jurisdictions, improving the efficiency of receivables financing.
- Promote the connection between core enterprises, government departments, financial institutions, and the Zhongzheng Receivables Financing Service Platform, confirming accounts receivable in a timely manner to alleviate difficulties in confirmation and risk control faced by core enterprises and government departments.
23. Increase Support for Tax Policies:
- Implement asset tax policies based on in-kind debt settlement.
- For financial institutions disposing of assets in-kind for debt settlement without obtaining input invoices, allow the application of the current VAT policy to offset the difference, and reduce or exempt deed taxes and stamp taxes in accordance with current regulations.
- Promote the implementation of the bad debt write-off management system for financial enterprises, further supporting financial institutions in expediting the disposal of non-performing assets.
Section Seven: Strengthen Organizational Implementation Guarantees
24. Strengthen Publicity and Interpretation:
- Financial institutions should actively carry out publicity and interpretation, diversifying forms, increasing frequency, and expanding the scope of publicity.
- Government departments and industry associations, through training and other methods, should guide private enterprises to operate in accordance with the law, cherish business reputation and credit records, and prevent and resolve risks.
25. Strengthen Implementation of Work:
- Local financial regulatory, development and reform, industry and information technology, finance and taxation, and industry associations should enhance communication and coordination, address bottlenecks and difficulties in policy implementation, strengthen policy supervision, summarize typical experiences, enhance publicity, and improve policy effectiveness.
- Further improve statistical monitoring, strengthen policy effect evaluations, and encourage industry associations to play a bridging and assisting role by establishing high-quality private enterprise directories and promptly sending accurate information to financial institutions, enhancing communication between banks and enterprises.
- Financial institutions should fulfill their primary responsibilities, promptly formulate detailed implementation rules, accelerate the implementation and refinement of policies.