On July 7, 2020, the People’s Bank of China (PBC), in collaboration with the China Banking and Insurance Regulatory Commission (CBIRC), held a symposium on financial support for stabilizing businesses and securing employment in Beijing. Pan Gongsheng, member of the PBC CPC Committee and PBC Deputy Governor, and Zhou Liang, member of the CBIRC CPC Committee and Vice Chairman of the CBIRC, attended and addressed the symposium. Liu Guoqiang, member of the PBC CPC Committee and PBC Deputy Governor, presided over the meeting.
The symposium conveyed and studied the decisions and arrangements of the CPC Central Committee and the State Council in terms of fulfilling the tasks of “ensuring stability on the six fronts” (employment, financial sector, foreign trade, foreign investment, domestic investment and expectations) and “maintaining security in the six areas” (employment, people’s basic livelihood, market entities, food and energy, stability of industrial and supply chains, and smooth functioning of grassroots administration ), and strengthening financial support for stabilizing businesses. The financial system was required to be fully aware of the importance and urgency of stabilizing businesses and securing employment, earnestly enhance political stance, strengthen the sense of responsibility, resolutely implement various financial support policies, and step up financial support for stabilizing businesses and securing employment, so as to make contributions to enterprises’ resumption of production and stable economic and social development.
It was pointed out at the symposium that, since the COVID-19 pandemic broke out, under the strong leadership of the CPC Central Committee and the State Council and the direct leadership of the Financial Stability and Development Committee (FSDC), the financial system has given top priority to addressing the impact of the pandemic and proactively taken a mix of policy measures to increase the total monetary and credit support, improve financial regulatory policies, guide the downward trend of lending rates, and optimize the credit structure, in a bid to render strong support for pandemic containment and economic and social development. In the first five months, RMB loans increased by RMB10.3 trillion, RMB2.3 trillion more than the growth in the same period of last year. In May, the average interest rate of loans issued to micro and small businesses (MSBs) was 42 basis points lower than that at end-2019. Outstanding inclusive MSB loans grew by 25.4 percent year on year, 12.2 percentage points higher than that of total loans.
It was required at the symposium that all financial institutions give first priority to providing support for stabilizing businesses and securing employment at present and in the near future, and grasp the rhythm of credit supply to keep it in line with the actual demands of market entities and ensure that credit funds are injected smoothly into the real economy. It was also made clear that intensive efforts should be made to enhance the capacity for providing financial services for MSBs, improve incentive schemes like internal transfer pricing and the weight of overall performance appraisal of branches and sub-branches, bolster the application of Fintech and boost the capacity for risk assessment. The requirement that those who have fulfilled their duties may enjoy liability exemption needs to be implemented so that community-level banks and business staff have the confidence, readiness, capacity and skills in issuing loans. Differentiated credit policies should be adopted to support the development of certain areas while containing the development of others. Specifically, priority ought to be placed on manufacturing and strategic emerging industries to raise the proportion of medium and long-term lending in the manufacturing sector. The policy of deferring principal and interest repayments on loans to micro, small and medium-sized enterprises (MSMEs) ought to be put in place, and payments on all inclusive loans to eligible MSBs should be deferred as much as possible. Moreover, financial institutions should also step up credit support for MSBs, focus on examining the first source of repayment, diversify credit products and raise the efficiency of loan issuance.
It was emphasized at the symposium that all financial institutions ought to understand the common stake shared by finance and economy from a political perspective and work hard to stabilize businesses and secure employment. To that end, financial institutions should enhance the quality and efficiency of services, cut profits in favour of their customers, and reduce fees to see that policy instruments that enable direct support for the real economy are implemented with tangible results. They should also actively leverage technologies, including the Internet and big data, to innovate service modes and increase financial support for the construction of new infrastructure, new urbanization initiatives and major projects, especially the manufacturing sector, enterprises in international industrial chains and service industries related to people’s livelihood, such as science and technology, green development, elderly care and housekeeping services. Financial institutions need to stick to the general principle of pursuing progress while ensuring stability, prevent risks while maintaining growth momentum and defend the bottom line that no systemic risk should occur. In the meantime, they ought to redouble efforts to strengthen the organization and leadership, change the style of work, prepare well-defined schedules and roadmaps, and earnestly fulfil their responsibilities to complete their tasks.
Chairmen of the Industrial and Commercial Bank of China (ICBC), the China Construction Bank (CCB), the Postal Services Bank of China (PSBC), the China Merchants Bank (CMB) and the China Minsheng Bank (CMBC) introduced their main practices in providing financial support for stabilizing businesses and securing employment at the symposium respectively. Heads of national banking financial institutions based in Beijing, and officials from relevant departments and bureaus of the PBC and the CBIRC were present at the main venue of the symposium. Heads of some national banking institutions headquartered outside Beijing, and officials in charge of relevant branches of the PBC and the CBIRC attended the symposium from parallel venues via the video conferencing system.
