The photo shows the exterior of the People's Bank of China in Beijing.Photo: Xinhua News Agency

The photo shows the exterior of the People's Bank of China in Beijing.Photo: Xinhua News Agency

The central bank, the People's Bank of China (PBC), on Sunday established a refinancing program for scientific innovation and technological transformation, aiming to strengthen financial support for technological transformation and equipment renewal for small and medium-sized high-tech enterprises. . companies.

The People's Bank of China said the new refinancing tool is the implementation and promotion of a new round of large-scale equipment renewal and trade-in of consumer goods, included in the action plan announced by the State Council of China on March 13. . .

Analysts said the new refinancing tool reflects full support for technology-based SMEs in early growth stages. The move marks financial support for digital, intelligent, high-end, green transformation and equipment upgrades in key industries, promoting the development of new high-quality production capacity in China.

The amount allocated for the refinancing program is 500 billion yuan ($69 billion), with an annual interest rate set at 1.75%, and the refinancing period is one year, renewable twice each year, the ministry said. The notification was released by PBC on Sunday.

The new refinancing will be made to 21 financial institutions. According to the central bank, financial institutions will be able to independently decide whether or not to grant a loan based on a company's application after assessing business risks, and will be able to set conditions for refinancing.

The creation of a refinancing program for technology transformation of traditional enterprises will help financial institutions provide credit support to high-tech small and medium-sized enterprises in the growth stage, as well as support technological transformation using digital, intelligent, high-end, and green. Helpful. The central bank said it is pursuing technology and equipment renewal projects in key areas, premised on independent decision-making and risk-taking.

Yang Zhang, chief analyst at the China Taiwan Securities Research Institute, told the Sunday Global Times that the refinancing scheme will not only cover science and technology transformation and equipment renewal projects in key areas, but also science and technology small and medium-sized enterprises. said it was clear.

Mr. Yang pointed out that under the new People's Bank special loan, the loan interest rate has become more favorable. The refinance rate set is 1.75 percent, which is significantly lower than the latest offered one-year loan prime rate (LPR) of 3.45 percent.

“The refinancing tool is also a concrete implementation of the agreements of the Central Financial Work Council and the Central Economic Work Council, which prioritize science, technology and innovation,” Yang said.

According to an official release, the Central Economic Work Conference held in December 2023 should guide financial institutions to expand support for scientific and technological innovation, green transformation, comprehensive finance for small and medium-sized enterprises, and the digital economy. said.

At a press conference on the economy during the second session of the 14th National People's Congress on March 6, the Governor said that in March during both sessions, the People's Bank established a refinancing program for scientific and technological innovation and technological transformation. Then he announced.

Analysts say the creation of new refinancing tools is in line with China's key policy agenda, such as trade-in of consumer goods and large-scale equipment renewals aimed at boosting consumption from both a demand and supply perspective. he pointed out. Several departments have recently announced new rules or rolled out action plans.

Earlier on Wednesday, China's financial regulators jointly announced the lifting of regulatory caps on car purchase loans for private internal combustion engine vehicles and new energy vehicles (NEVs). This means that zero down payments will be allowed when purchasing a car, with the aim of promoting trade. -Programs in the automotive field.

On April 2, China's top economic planner discussed with six private companies the task of replacing the old with the new, including a policy roadmap. The economic planner encouraged private companies to participate in trade-in programs to boost consumption.

At present, the focus of China's economic activities is still on technological transformation and upgrading, or improving the level of industrial productivity through science and technology, that is, new high-quality productive forces, new forms of industrialization, and other industrial advancements. , said member Pan Helin. The Information and Communication Economic Expert Committee under the Ministry of Industry and Information Technology told the Global Times on Sunday.

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