China asks major state banks to add $240 billion in inclusive loans to support small businesses this year
(Yicai Global) May 6 — China has asked major state-owned banks to add 1.6 trillion yuan ($240.4 billion) in inclusive lending this year to relieve micro, small and medium enterprises and self-employed people. contractors. occupied households.
Banks will renew loans, extend and adjust repayment terms and waive late interest for micro, small and medium enterprises and sole proprietorships to promote job stability and ease operational pressures under of the Covid-19 epidemic, according to a decision taken at the executive meeting of the State Council chaired by Premier Li Keqiang yesterday.
Outstanding inclusive loans among the six major state-owned commercial banks stood at nearly 6.6 trillion yuan at the end of last year, up 1.7 trillion yuan, or 35.7 percent, from to the previous year. A single inclusive loan to a small or micro business is less than 10 million CNY (1.5 million USD).
To help businesses affected by the pandemic return to work and production as soon as possible, hardship mitigation efforts should be intensified, while ensuring stable energy prices and smooth transportation and logistics, said Wen Bin, chief researcher at China Minsheng Bank, told Yicai Global. In addition, domestic needs should be expanded and consumption recovery encouraged, he added, noting that the role of supporting the economy through infrastructure investment should also play its full role.
Local governments should also set up special relief funds for micro, small and medium-sized enterprises and self-employed households to subsidize rents, warranty fees and loan interest for people in difficulty, the official added. Board of state.
China’s official Purchasing Managers’ Index for the manufacturing sector fell 2.1 percentage points to 47.4 in April from a month earlier, remaining in contraction territory for the second consecutive month, data showed. by the National Bureau of Statistics on April 30. no less than 6.5 points to 41.9 during the period.
The State Council also decided to increase the issuance of credits targeting foreign trade enterprises, in a bid to maintain the stability of the economy and industrial and supply chains.
The reduced ability of Chinese foreign trade enterprises to accept orders could lead to orders shifting overseas, Wen said. The index of new export orders fell 5.6 points to 41.6 percent last month from March, while Vietnam’s index hit new highs in the past two months, it said. he noted, adding that this trend needs more attention.
Editors: Dou Shicong, Futura Costaglione