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China to roll out measures to cut smaller firms' financing costs

Kitco News

BEIJING (Reuters) - China will roll out more measures to cut financing costs for smaller companies, state television reported on Wednesday, citing the cabinet, amid expectations of additional stimulus by Beijing to boost growth.

China has taken a series of steps in recent months to channel more loans to small private firms which are vital for employment and growth amid a bruising trade war with the United States.

The government would take steps to “ensure real interest rates on financing for small and micro firms to be reduced further”, the State Council said.

The measures would include deepening reforms to improve commercial banks’ loan pricing mechanisms and pilot reforms to improve financial services for small and private firms, it said.

The government will ensure a significant rise in bonds issued by financial institutions to more than 180 billion yuan this year to boost lending to smaller companies, and boost credit for manufacturing and services sectors.

China would boost credit for firms that use intellectual property as collateral to help promote innovation, the cabinet said.

China will also maintain prudent monetary policy and keep liquidity reasonably ample, the cabinet added, reaffirming the current monetary policy stance.

Reporting by Beijing Monitoring Desk, Cheng Leng and Kevin Yao; writing by Se Young Lee; Editing by Nick Macfie

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