Day: July 12, 2020

(Peoples Daily Online)09:04, July 02, 2020

More and more policy lenders and commercial banks in China have managed to provide targeted loans for small and micro firms efficiently through cooperation with online platforms, including e-banks, since the beginning of this year.

(Photo/pixabay.com)

Chang Huanyu, an executive of a sound production service company in Chengdu, capital of southwest China鈥檚 Sichuan province, recently got a credit line of 1 million yuan ($141,600) from one of the major Internet banks in China, XWBank.

The loan helped Chang effectively solve the financing problem he faced when he needed more money to complete increasing online orders his company received during the COVID-19 epidemic.

With a mobile phone and an ID card, Chang was quickly granted a loan, which did not require a pledge or guarantee, and the interest rate was not high.

Chang鈥檚 company was one of the firms in the city that received loans online under a recent project launched by XWBank to help small and micro companies.

Chang couldn鈥檛 have got the loan merely through online application if it were not for the cooperation between XWBank and a policy lender, Sichuan branch of the Export-Import Bank of China, according to an executive of XWBank.

Through cooperation with Sichuan branch of the Export-Import Bank of China, XWBank brings via its online financial services the low-cost sub-loan fund provided by the policy lender to small and micro firms which need it, the executive explained.

On May 27, Sichuan branch of the Export-Import Bank of China granted a 300 million yuan (over $42 million) sub-loan fund for stabilizing employment to 11,337 small and micro enterprises through XWBank, saving jobs for around 220,000 people.

With the help of the Internet, these subsidized loans can be provided for small and micro firms that need them in a more precise and efficient way, pointed out Dong Ximiao, chief researcher of XWBank.

Policy lenders in China have reportedly prepared nearly 1 trillion yuan more credit quota than last year, and will issue more bonds this year.

An addition, over 100 billion yuan sub-loan funds have been provided for small and medium-sized banks, especially e-banks, to ease the pressure on small and micro firms in terms of financing, according to reports.

Not just policy lenders, many commercial banks have also intensified efforts to serve small and micro enterprises by actively cooperating with Internet banks and platforms.

MYbank, a leading online private commercial bank under Ant Financial Services Group, recently teamed up with organizations including All-China Federation of Industry and Commerce to launch a contactless loan project for small and micro companies.

The project, which attracted large state-owned banks like Postal Savings Banks of China and city commercial banks including Bank of Shizuishan, in northwest China鈥檚 Ningxia Hui autonomous region, offers safe and convenient financing services to small and micro firms, the self-employed, and farmers through MYbank鈥檚 online service channels on platforms including Alipay.

The project had provided more than 526.3 billion yuan (about $74.5 billion) worth of loans for over 13 million clients as of May 31.

China Banking and Insurance Regulatory Commission (CBIRC) encourages policy lenders and commercial banks to provide targeted loans for small and micro firms by enhancing business ties with Internet-based banks, an official of the CBIRC noted.

Closer cooperation with online platforms including e-banks has also led to significant improvement in efficiency of credit decision-making for policy lenders and commercial banks.

Weng Ziqi, executive of a catering company in east China鈥檚 Fujian province, recently got a credit line of 10 million yuan from China Everbright Bank (CEB) via an online review platform in less than 24 hours after submitting an application.

In the past, the whole process would take about a month, said Weng, whose company, which has nearly 100 outlets, had been under great pressure financially at the beginning of the year due to the COVID-19 pandemic.

The cooperation model of 鈥淚nternet platform + bank鈥?enables the bank to use the massive transaction data provided by the online review platform to assess the actual state of operation of businesses and their fund demand, according to the CEB, noting that the model has greatly improved its efficiency of credit decision-making.

In order to better serve small and micro enterprises, banks need to solve the problem of information asymmetry and grasp the actual situation of their clients more efficiently and accurately, said Ren Zenggang, deputy director of National Institution for Finance and Development of Chinese Academy of Social Sciences.

Internet banks and platforms have the advantage of traffic and data, which can help quickly judge the business condition of small and micro enterprises and individually-owned businesses with a lower cost of manpower, Ren noted.

By analyzing operation activities and relevant data of businesses via digital risk control models, banks can better assess the actual financing needs and loan repayment capabilities of companies, which help make detailed plans for such aspects as repayment period, interest rate level, and repayment methods, said Dong.

Such analyses are helpful for reducing risks and realizing the sustainability of inclusive financial services, Dong noted.

(Xinhua)09:06, July 02, 2020

Chinas monetary authorities lowered interest rates of major lending facilities, given a projection of moderate consumer inflation in coming quarters, in support of credit to smaller businesses hit by the novel coronavirus pandemic.

The probability of an obvious inflation rebound is low, and the consumer price index is predicted to drop gradually by quarter this year, a group of central bank officials wrote in an article published on Wednesday.

Based on the projection, the Peoples Bank of China, the countrys central bank, decided to cut the interest rates of the re-lending and rediscount lending facilities as of the beginning of July.

Cutting the rates is a signal of easing money supply to benefit the real economy, although some PBOC officials recently hinted at withdrawing special monetary stimulus measures, given that the pandemic is almost under control in China and economic recovery in the second quarter was strong, according to analysts. Those special measures were implemented to boost the economy when COVID-19 hit.

The one-year interest rate charged by the PBOCs lending to financial institutions that take deposits锛峜alled the re-lending rate锛峝ecreased by 0.25 percentage point to 2.25 percent. That is aimed especially at increasing cheaper credit for agricultural and small firms. Meanwhile, the rediscount rate dropped by the same extent to 2 percent, the central bank said.

The bank also lowered the interest rates of re-lending for financial stability purposes by 0.5 percentage point to 1.75 percent, a central bank statement showed.

Its the first time in a decade that the PBOC has adjusted therate of rediscount, a monetary policy tool to support banks commercial paper financing and replenish liquidity. Commercial paper is a type of promissory note to finance short-term credit for large institutional buyers.

In China, the rediscount facility has been an important measure since 1995. It was used originally to solve corporate loan delinquencies by providing ready access to funding.

The central bank said it will use flexible and appropriate monetary policy in pursuit of its inflation stability mandate. With the impact of COVID-19, intensified inflation or deflation needs to be prevented during the economic recovery, according to the article from PBOC Monetary Policy Department.

In the second quarter, the output is predicted to return to a natural growth level, and the narrowed output gap will help to stabilize prices, it said.

Lower interest rates for the lending facilities indicated that the stance of easing monetary policy has not yet been reversed. Still, market participants have been worrying about monetary tightening since mid-April given rising interbank rates and government bond yields, said Ming Ming, a senior researcher at CITIC Securities. The central bank arranged a quota of 1.8 trillion yuan ($254.8 billion) for re-lending and rediscount after the COVID-19 outbreak, and part of the quota had not yet been used as of Wednesday, according to the PBOC.

The central bank is likely to increase the use of such structural tools rather than flooding the economy with liquidity in order to improve the efficiency of the monetary policy transmission mechanism. The measures can also provide credit directly to the real economy, said Yan Se, chief economist at Founder Securities.

At an executive meeting in mid-June, the State Council required financial institutions to convey 1.5 trillion yuan of their profits to firms to help them survive the COVID-19 pandemic.

Meeting participants also called for cutting the reserve requirement ratio锛峵he proportion of cash that financial institutions must keep on deposit锛峵o maintain ample and reasonable liquidity.

Lou Feipeng, a senior economist at Postal Savings Bank, said that under the measures, banks will be able to obtain funds from the PBOC at lower costs, and real lending rates will continually decrease in the coming months.

We expect to see a broad-based cut to Chinas reserve requirement ratio by 50 basis points in the third quarter, or an equivalent amount of liquidity injection via targeted RRR cuts or other measures such as the central banks re-lending and rediscount program, said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered.

He estimated that China will cut the interest rate on the medium-term lending facility by 10 basis points in the third quarter, which will encourage lower loan prime rates.

(Xinhua)09:08, July 02, 2020

BEIJING, July 1 (Xinhua) — China is steadily reviving its economy as the country strives to contain COVID-19. The following facts and figures indicate how the country is forging ahead in resumption of work and production:

— A record high of 17 Chinese companies have made it into the 2020 BrandZ Top 100 Most Valuable Global Brands Ranking, compared with 15 last year, according to BrandZ, a global brand equity platform.

E-commerce giant Alibaba led Chinese firms in the ranking, rising to the sixth place this year, up one spot from last year with a value of 152.53 billion U.S. dollars.

Bolstered by innovation and creativity, Chinese popular video-sharing app TikTok, known as Douyin in China, entered the list for the first time and was placed at the 79th.

— Authorities have announced class-resuming arrangements for non-senior students in high schools in Wuhan, the capital of central Chinas Hubei Province and a city previously hard hit in the outbreak of COVID-19.

Schools will reopen on July 10 for senior high school freshmen and sophomores, including those in secondary vocational and technical schools, and their summer holiday will begin on July 31, according to a press conference Tuesday.

Non-senior students in junior high schools will end their online courses on July 5. Teachers and students will return to schools on Aug. 10, and classes will last until Aug. 30. Students in primary schools and kindergartens will start their summer holiday on July 5.

— A total of eight hospitals and eight township-level health centers in northwest Chinas Golog Tibetan Autonomous Prefecture will have access to telemedicine services of the countrys first-tier hospitals by August.

Golog, located in Qinghai Province, is Chinas highest-altitude autonomous prefecture, with the highest point at an altitude of 6,282 meters and the highest-elevated county at nearly 4,400 meters. The harsh environment and backward economy have dragged down the health condition of locals.

The telemedicine treatment in Golog will focus on the construction of remote medical imaging and remote ultrasonic examination centers.

— Beijing opened 52 additional roads on Tuesday in Haidian District, the capitals tech hub, for the testing of autonomous vehicles to push the speedy development of self-driving technology.

The roads totaling 215.3 km are part of a demonstration area for self-driving vehicles. They spread over 100 square km in the northern region of Zhongguancun Science City, according to the Haidian district government.

According to the plan, Haidian District will continue to open more roads for testing self-driving vehicles in the demonstration area in 2020.

(Xinhua)09:28, July 02, 2020

BEIJING, July 1 (Xinhua) — Chinas e-commerce industry continued to thrive last year despite mounting downward economic pressures and lingering trade tensions, according to a report from the Ministry of Commerce.

China led the world in e-commerce, with about 51.26 million people employed in the sector in 2019.

The countrys e-commerce transactions hit 34.81 trillion yuan (about 4.9 trillion U.S. dollars) last year, with online retail sales reaching 10.63 trillion yuan, up 16.5 percent year on year.

E-commerce has contributed a great deal in terms of promoting consumption, stabilizing foreign trade, alleviating poverty, and boosting employment, playing a key role in ensuring the countrys steady and high-quality development, the report said.

In 2019, online retail contributed 45.6 percent of the growth in the countrys total retail sales.

The report also said that China has established bilateral e-commerce cooperation mechanisms with 22 countries.

In addition, China approved 24 cross-border e-commerce pilot zones in 2019, bringing the total number to 59. These pilot zones provide a streamlined system with simplified regulations for faster examination and approval, customs clearance, and easier information sharing for cross-border e-commerce imports and exports.

Since the start of the year, the e-commerce industry has played a prominent role in guaranteeing supplies, facilitating work resumption and stimulating consumption amid the COVID-19 epidemic, said the report.

The ministry pledged more measures to promote the digitalization of traditional industries and ensure the high-quality growth of the e-commerce sector.

China had more than 900 million internet users at the end of last year, with an internet penetration rate of 64.5 percent, according to the report.

(Xinhua)09:32, July 02, 2020

BEIJING, July 1 (Xinhua) — China will focus on improving financial services to micro, small and medium-sized enterprises in an effort to ensure their sound development, according to a State Council executive meeting on Wednesday.

The meeting, presided over by Chinese Premier Li Keqiang, said that special local government bonds will be allowed to appropriately support small and medium-sized banks in replenishing capital.

Local governments were urged to give priority to supporting small and medium-sized banks that are capable of sustainable market-based operations, thus enhancing their ability to support micro, small and medium-sized enterprises financially, according to the meeting.

In addition, local governments should supervise improvements to the banks internal control mechanisms and strengthen oversight when utilizing special local government bonds.

A draft regulation on ensuring that outstanding payments are made reliably to small and medium-sized enterprises (SMEs) was adopted at the meeting, as the country steps up efforts to help the SMEs tide over the current crisis to ensure stable economic fundamentals.

The regulation introduced new guarantees for SMEs to ensure they are paid in full by government agencies, public institutions and large enterprises, including limits on payment times, information disclosure on overdue payments, and punishment for defaults.

The meeting also unveiled new measures to boost the development of national high-tech industrial development zones. Pilot policies implemented in pilot free trade zones will be adopted and promoted in the high-tech zones.

Restrictions on visa and residence permits will be eased for overseas talent, and greater opening-up and cooperation are pledged to help the high-tech zones better integrate into international industrial and supply chains.