The People’s Bank of China has established a re-lending facility for technological innovation and technological upgrading to support scientific and technological advancement, technological transformation, and equipment renewal.

Release Date:

2024-04-07

To implement the spirit of the Central Economic Work Conference and the Central Financial Work Conference, advance the “five major initiatives” in the financial sector, and carry out the decisions and arrangements of the State Council Executive Meeting on promoting a new round of large-scale equipment upgrades and consumer‑goods trade‑ins, the People’s Bank of China has established a re-lending program for technological innovation and technological upgrading. This initiative aims to incentivize and guide financial institutions to increase their financial support for technology‑based small and medium‑sized enterprises, as well as for technological upgrading and equipment‑replacement projects in key sectors. The re‑lending program for technological innovation and technological upgrading builds on and succeeds the earlier policies of the original technological innovation re‑lending and the special re‑lending for equipment upgrading and transformation. Drawing on the experience gained from these two instruments, the program has been refined and improved to help financial institutions enhance the quality and efficiency of their services, thereby better meeting the financing needs of technological innovation, technological upgrading, and equipment renewal.

A re-lending facility totaling RMB 500 billion has been established for technological innovation and technological upgrading, with an interest rate of 1.75% and a one-year term, renewable twice for additional one-year periods. The program is open to 21 financial institutions, including the China Development Bank, policy banks, state-owned commercial banks, the Postal Savings Bank of China, and joint-stock commercial banks. This re-lending scheme will help guide financial institutions, under conditions of independent decision-making and self-assumed risk, to extend credit support to technology‑based small and medium-sized enterprises in their start-up and growth phases, as well as to projects involving digitalization, intelligent transformation, high‑end upgrades, and green technologies—particularly those focused on equipment modernization.

Financial institutions, upon receiving applications from enterprises and referring to the list of eligible enterprises and the project inventory provided by the relevant industry authorities, shall independently determine whether to extend loans and set the terms thereof, in accordance with the principle of assuming risk on their own. Financial institutions may apply to the People’s Bank of China for reloans; the People’s Bank of China will review the loan records and, for loans that meet the requirements and are included in the list of eligible enterprises or the project inventory, disburse reloans equal to 60% of the principal amount of such loans.

[Editor-in-charge: Zhou Chuqing]

Source: Website of the People’s Bank of China

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