Breaking News
0

China to cut private firms' financing costs, improve access to funds - Xinhua

EconomyFeb 14, 2019 07:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Red flags flutter in front of the Great Hall of the People in Beijing

BEIJING (Reuters) - China's state council said on Thursday it aims to cut private firms' financing costs to reasonable and stable levels and improve their ability to raise funds through various measures including issuing bonds, the Xinhua news agency reported.

The government has in recent months unveiled a series of policy steps to support small and private firms that are vital for economic growth and employment.

"The private economy plays an irreplaceable role in stabilising growth, promoting innovation, increasing employment, and improving people's livelihood," Xinhua quoted the cabinet as saying.

Recent policy measures have achieved some results, but some private firms still struggle to get funding and financing costs remain high for them, the cabinet said.

Efforts will be made to improve monetary policy transmission mechanisms to make banks more willing to lend to private firms, the cabinet said. Private firms, with limited collateral, are considered riskier than state-backed firms.

The government will also encourage financial institutions to boost investment in debt issued by private firms and improve the effectiveness of the central bank's targeted reserve requirement ratio (RRR) cuts for banks to help private companies.

To free up more funds for lending, particularly to vulnerable smaller firms, the People's Bank of China has cut RRR - the amount that banks need to set aside as reserves - five times over the past year.

Further reserve reductions are expected in coming quarters, alongside tax cuts and increased infrastructure spending to support a slowing economy pinched by a trade war with the United States.

Regulators will speed up approvals for private firms' initial public offerings and refinancing activities, and allow such firms to issue convertible bonds, the cabinet said.

The collapse of a complex web of debt guarantees involving several private firms highlights risks in the financial system and opens up a potentially hazardous front for an economy in the grip of its slowest growth in nearly three decades.

China to cut private firms' financing costs, improve access to funds - Xinhua
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email