Wang Zhaoxing, vice-chairman of China’s insurance and banking regulator, told reporters on Tuesday that China’s banks were far from meeting the borrowing requirements of the private sector, and the trade war was only making things worse.
“To really solve the high cost and the difficult [private firms have] in borrowing from banks … we are still a long way away,” Wang said, according to the South China Morning Post. “We need to work on it.”
Some financial leaders, such as chairman of the Industrial and Commercial Bank of China, Yi Huiman, defended their lending practice, espousing that state banks “treat state-owned enterprises and private enterprises equally.”
Others, however, argued that large government-backed banks were never intended to effectively serve China’s private sector.
“If a large organisation does not change its mindset to serve small and micro enterprises, it is very difficult to be efficient,” said Tian Guoli, chairman of China Construction Bank Corp., China’s second largest lender. “In the past, non-performing loans were very high, so lending to small firms was discouraged.”