Yi Gang, head of the People’s Bank of China, has promised to use the “three arrows” of debt, equity and bank loans to help the country’s private businesses access funding, Reuters reports.
While there are no immediate liquidity threats, Yi said, the Chinese economy will need a stronger push to rebalance in favour of traditionally cash-starved areas in the private sector.
“The problem of financing difficulties for private enterprises is particularly prominent, mainly because financial institutions’ risk-taking capacity is falling and they are unwilling to take risks,” Yi told state media.
So far in 2018, the central bank has released Rmb 2.3 trillion ($332.60 billion) in liquidity through a series of reserve rate cuts and soaking up medium-term lending facility loans, according to Yi.
The bank will also set up a new equity financing tool for private companies, as well as build on a recent program encouraging corporate bond issuance that has already raised Rmb 1.9 billion for three firms participating.
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