China to step up financing support for private small firms

A woman wearing a mask walks past the headquarters of the People’s Bank of China, the central bank, in Beijing, China, as the country is hit by an outbreak of the new coronavirus, Feb 3, 2020. REUTERS/Jason Lee/File photo

BEIJING  – China will step up financing support for private micro and small enterprises, its central bank said on Wednesday, as the country aims to build on a recovery from COVID-19 disruptions while facing weaker demand abroad and a domestic property downturn.

The People’s Bank of China (PBOC) will support reasonable bond financing needs for private companies, the central bank of the world’s second-largest economy said in a statement after a work meeting.

“We will precisely and effectively implement the prudent monetary policy, keep an appropriate pace of loan issuance, and keep the total supply of money and credit at an appropriate amount and grow steadily,” the central bank said.

The private sector provides a third of all jobs in China and creates 90 percent of new urban jobs.

But in recent years, the government has sought to tighten its grip on private businesses, by taking stakes in non-state enterprises or installing officials in large firms.

In its statement, the PBOC added it would maintain harsh punishments for corruption and “appropriately cope with suppression from the U.S. and Western countries.”

The central bank will also steadily and orderly promote institutional reform, it said.

China last week announced a sweeping government reform, including the establishment of a new financial regulatory body that would absorb some supervisory functions from the PBOC.

Under the changes, the central bank is expected to focus more on conducting monetary policy and macro-prudential supervision, analysts said.

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