Ensuring Smooth Financing for Private Enterprises Through Multiple Channels: The “Financial 25 Measures” Sets Out a Roadmap

　　Financial support for the private sector has been further strengthened, and financing channels for private enterprises are expected to continue expanding. On the 27th, reporters learned that the People’s Bank of China, the National Administration of Financial Regulation, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, and the All-China Federation of Industry and Commerce—eight departments in total—jointly issued the “Notice on Strengthening Financial Support Measures to Boost the Development and Growth of the Private Sector” (hereinafter referred to as the “Notice”), which sets out 25 specific measures to support the private economy.

　　“The Notice continues the longstanding support for private‑sector financing, bolstering such support across multiple dimensions. Against a backdrop of weak demand that exhibits cross‑cycle characteristics, this round of policy measures to support private‑sector financing comes at just the right time,” according to a report released by CICC.

　　First, the Notice clearly defines the objectives and priorities for financial services to private enterprises. In terms of overall volume, by setting annual service targets for private firms and increasing the weighting of related business activities in performance evaluations, financial support for private enterprises will be strengthened, with a gradual rise in the share of loans extended to this sector. Structurally, greater support will be directed toward key areas such as technological innovation, “specialized, refined, distinctive, and innovative” enterprises, green and low-carbon development, and industrial foundation reconstruction projects, as well as to small, medium, and micro-sized private enterprises.

　　Industry insiders say that setting annual targets can effectively enhance the financial sector’s awareness of and support for the private economy, further optimizing the allocation of financial resources to private enterprises and the broader private sector.

　　Secondly, the Notice once again underscores comprehensive support for private-sector financing. By “continuously increasing credit resource allocation,” “unblocking bond‑financing channels for private enterprises,” and “expanding equity‑financing opportunities for high‑quality private firms,” financing avenues for the private sector will be fully broadened.

　　Wang Zhengguo, Co-Head of the Research Services Division at CITIC Securities’ Fixed Income Department, stated that the Notice is geared toward addressing the financing challenges faced by private enterprises, with expanding their access to financing channels as its primary focus. Adopting a policy package akin to a “three‑arrow strategy,” it provides comprehensive financing support to private firms across three key channels: loans, bonds, and equity.

　　In particular, with regard to enhancing the ease of direct financing for private enterprises, the Notice sets out detailed measures.

　　Xiao Chengzhe, Chief Fixed-Income Analyst at BOC International Securities, stated that, with respect to bond financing, addressing the persistent issue of low market confidence in private‑enterprise bonds, the Notice underscores the importance of fully leveraging the credit‑enhancing role of bond‑financing support tools. At the same time, it encourages and guides institutional investors to increase their allocation to private‑enterprise bonds. On the institutional front, in light of the inherent characteristics of private firms—such as shorter life cycles and relatively higher business risks—the Notice also sets out a clear path for developing the high‑yield bond market. By advancing legal‑based frameworks and market‑oriented pricing, coupled with robust resolution mechanisms and appropriate risk‑return profiles, the Notice aims to alleviate the longstanding challenges private enterprises face in accessing bond‑market financing.

　　Wang Zhengguo stated that the Notice underscores seizing the opportunity presented by the registration‑based reform to optimize listing criteria and further facilitate equity financing channels for private enterprises. In recent years, a substantial number of eligible “hard‑tech” firms and private companies embodying the “three innovations and four new developments” have capitalized on policy incentives—such as allowing unprofitable companies, those with special equity structures, and red‑chip enterprises to list—to secure public‑market funding. At the same time, the Notice emphasizes continuing to deepen market‑oriented reforms in mergers and acquisitions and restructuring, supporting private firms in enhancing quality and efficiency and scaling up through such transactions. Moreover, the document highlights advancing the development of regional equity markets, clarifying the role of equity investment funds, leveraging the catalytic function of government‑guided funds, and refining investment exit mechanisms, among other measures.

　　Furthermore, the Notice calls for optimizing financing‑related policies to strengthen the financial support capacity of the private sector. Dong Ximiao, Chief Researcher at China Merchants Bank‑UnionPay, remarked that “strengthening the financial support capacity of the private sector” is a novel formulation. The key lies in continuously refining the financing‑and‑credit‑enhancement framework, improving risk‑sharing and compensation mechanisms, and boosting both the ability of private enterprises to access financial services and the willingness of financial institutions to provide them.

　　Data show that as of the end of September 2023, the outstanding balance of inclusive small and micro loans stood at RMB 28.74 trillion, up 24.1% year on year. By the same date, the bond financing support tool for private enterprises had cumulatively provided credit enhancement for RMB 242.6 billion in bonds issued by 140 private firms. Nevertheless, constrained by factors such as the relatively weaker risk‑resilience of private enterprises and their limited pool of collateralizable assets, the ease of access to financing for private firms remains in need of further improvement.

　　Zhou Hongyi, founder of 360 Group, stated that the 25 specific measures once again send a strong signal of support for the development of the private sector, with enhanced top-level design across multiple dimensions and refined policy responses, further ensuring that favorable policies are delivered precisely and effectively.

　　According to a report by CICC, as fiscal expansion gains momentum and financing-support policies are implemented in tandem, the operational pressures and financing challenges faced by private enterprises are expected to continue easing. Xiao Chengzhe stated that, with the rollout and effective implementation of the “Notice,” the efficiency of financial services for the private sector is likely to improve further, and the capacity of financial services to support the real economy is poised to strengthen.

　　It is reported that, in the next phase, the People’s Bank of China and other relevant authorities will guide financial institutions to promptly implement the requirements set forth in the Notice, formulate detailed implementation rules, and strengthen statistical monitoring and policy‑effectiveness assessments to ensure that the policies benefit private enterprises. (Reporter Zhang Mo)

[Editor-in-charge: Liu Yang]

Source: Economic Information Daily