The central bank said in an online statement that the refinancing will cover 60% of the principal amount of eligible loans to high-tech SMEs and can be extended twice for an additional year each time.
“[The loans] For financial institutions to undertake projects focused on digitization, intelligence enhancement, high-end upgrades, green technology transformation in key areas, and equipment renewal, as well as technology-centric enterprises in start-up and growth stages. We will guide you in providing credit support. ” said.
By the end of last year, the People's Bank of China had actively utilized 17 structural support tools, and the cumulative outstanding amount had reached 7.5 trillion yuan (16.4% of central bank assets).
Thirteen of these were initiated as temporary measures during the pandemic, including loans and refinances for small businesses, toll roads, private businesses, real estate delivery, logistics and carbon emissions reduction. There are 7 items that have already expired.
China's monetary mix is more “effective” and economically focused than the easing policies of Western countries
China's monetary mix is more “effective” and economically focused than the easing policies of Western countries
The previous re-lending tool for technology was estimated at 400 billion yuan and was launched in April 2022 and subsequently expired. The initial equipment renovation tool had a quota of 200 billion yuan and was actively used from September to December 2022.
“Structural monetary policy tools are mainly operated by large banks, but the actual loan recipients are mainly small and medium-sized enterprises,” China Foreign Exchange Trade System analyst Zhong Jiani wrote in an article last month. said.
“If we aim to achieve credit expansion through monetary policy, it is essential to prioritize the use of traditional policy tools, particularly interest rate cuts and comprehensive reserve requirement reductions,” he said.
This is in line with the need for large-scale equipment renewal mentioned at the Central Finance and Economic Commission meeting in February, and this goal serves the dual purpose of turning the country's huge fixed asset investments into a source of economic stimulus. Fulfill. We are driving a huge manufacturing sector forward.
Structural measures such as the refinancing program are aimed at helping China cope with a sustained downturn in the real estate market and weak investor confidence, both of which will help the economy grow by 5% this year. It will test the country's ambition to
“[These] tools are gaining more attention,” Golden Credit Ratings economist Wang Qing wrote in a note on Sunday.
“[They] This is not only a way to invest the base money supply, but also allows you to more accurately direct the flow of funds. ”
