View of PBC building in Beijing Photo: VCG
The central bank, the People's Bank of China (PBC), on Sunday launched the Scientific and Technological Innovation and Transformation Refinancing Program, aiming to strengthen financial support for technological innovation and equipment renewal for China's small and medium-sized enterprises (SMEs). Established. High-tech field.
PBC said the tool will support a new round of large-scale equipment renewals and consumer goods trade-ins introduced in the action plan announced by China's State Council on March 13.
Analysts said the new tool reflects full support for technology-based small and medium-sized enterprises in the early stages of growth. The move represents financial support for digital, intelligent, high-end, green transformation and equipment upgrades in key industries, which will promote the development of new high-quality production forces in China.
The amount allocated to the program is 500 billion yuan ($69 billion), with an annual interest rate set at 1.75% and a re-lending period of one year, according to a notice released by the People's Bank on Sunday.
Funds will be issued 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.
This re-lending program allows financial institutions to provide credit support to high-tech small and medium-sized enterprises in growth stages, as well as to support technology transformation and capital renewal projects in key sectors, leveraging digital, intelligent, high-end, and green technologies. Helpful. The central bank said it is premised on independent decision-making and risk-taking.
Yang Zhang, chief analyst at the China Taiwan Securities Research Institute, told the Global Times on Sunday that the re-lending facility will target small and medium-sized enterprises in science and technology, as well as technology transformation and equipment renewal projects in key areas. Clearly stated.
Mr. Yang pointed out that under the new People's Bank of China's special loan, loan interest rates have become more favorable. The refinance rate he set is 1.75%, which is significantly lower than the latest offered prime rate of 3.45% for a one-year loan.
“The re-lending tool is also a concrete realization of the Central Financial Work Council and Central Economic Work Council agreements that put science, technology and innovation among the priorities,” Yang said.
The official said that the Central Economic Work Conference to be held in December 2023 will encourage financial institutions to increase support for scientific and technological innovation, green transformation, comprehensive finance for small and medium-sized enterprises, and the digital economy. He said that it should be done. release.
In March, during its bi-annual session, the PBC announced the establishment of a re-lending facility for scientific innovation and technological transformation.
Analysts say the new re-lending facility is in line with China's key policy agenda of consumer goods trade-in and large-scale equipment renewal, aimed at boosting consumption from both supply and demand perspectives. said. Several departments have recently announced new rules or rolled out action plans.
On Wednesday, China's financial regulators jointly announced the lifting of regulatory caps on auto loans for private internal combustion engine vehicles and new energy vehicles. This means zero down payment will be allowed for car purchases to facilitate car trade-in programs. Automotive department.
On April 2, China's top economic planner held talks with six private companies about replacing the old with the new in the policy roadmap. The economic planner encouraged private companies to participate in trade-in programs to boost consumption.
The focus of China's economic activities remains on technological transformation and sophistication, or the improvement of the level of industrial productivity through science and technology, that is, new high-quality productive forces, new forms of industrialization, and the sophistication of other industries. said Pan Helin, a member of the expert committee. The Committee for the Information and Communication Economy Sector under the Ministry of Industry and Information Technology told the Global Times on Sunday.
