China to Step Up Bank Reserve Ratio Cuts to Help Small Firms
BEIJING/SINGAPORE (Reuters) - China will step up its policy of targeted cuts to banks' required reserve ratios to encourage financing for small and medium-sized businesses that play a key role in economic growth.
Beijing has been urging banks to continue lending to struggling businesses, especially smaller private concerns that account for more than half the country's economic growth and most of its jobs.
In a detailed policy document published on the central government's website late on Sunday, the State Council said China will also accelerate initial public offerings for small and medium-sized enterprises (SMEs).
Financing channels for SMEs will be further expanded to help lower their funding costs via preferential monetary policies and easier access to capital markets, the document said.
China will also focus on supporting rediscounting of small bills -- worth 5 million yuan ($744,247) or less -- as a way of helping small firms secure financing.
In addition, bank loans to SMEs with credit lines of 10 million yuan or less will be eligible for use as collateral against the central bank's medium-term lending facilities.
Accelerated approvals for IPOs by smaller firms will help to encourage direct financing and such companies will be encouraged to list on the main over-the-counter equity board.
In debt financing, China will promote high-yield bond market and private debt placements, and provide more tools, such as to help mitigate credit risks, to help SMEs raise capital and ease liquidity pressures.
U.S. Issues Warrant for Chinese Billionaire Alleged to Evade Nearly $2 Billion in Tariffs
China Wins WTO Case Against US in Trade War Move
Huawei's Ties With Partners FedEx, Flex Fray on U.S.-China Tensions
China's Beijing Kunlun to Relaunch Grindr IPO
Trump Sets New Date for Tariffs on Another $300 Billion of Chinese Imports
Alibaba and the $15 Billion Question: Amid Hong Kong's Protests, When to List?