Five Major Financial Initiatives Bolster All-Round Rural Revitalization

Finance is the “living water” that sustains the real economy and serves as a crucial pillar for rural revitalization. On August 5, the People’s Bank of China announced that it, together with the National Administration of Financial Regulation, the China Securities Regulatory Commission, the Ministry of Finance, and the Ministry of Agriculture and Rural Affairs, has jointly issued the “Notice on Launching a Special Campaign to Study and Apply the Experience of the ‘Ten‑Million Project’ and Strengthen Financial Support for All‑Round Rural Revitalization” (hereinafter referred to as the “Notice”). Under this initiative, five major special campaigns will be implemented to bolster financial support for the comprehensive revitalization of rural areas.

  Specifically, the five major special initiatives are: the Special Initiative on Financial Support for Food Security; the Special Initiative on Consolidating and Expanding the Outcomes of Financial Assistance; the Special Initiative on Financial Services for Rural Industrial Development; the Special Initiative on Financial Support for Rural Infrastructure and Development; and the Special Initiative on Empowering Rural Governance through Finance.

  Among these, the special initiative to ensure financial support for food security proposes expanding financial service coverage across the entire grain industry chain—encompassing production, circulation, procurement and storage, and processing—while innovating financing models for high-standard farmland development and facility‑based agriculture. It also calls for deepening financial services for revitalizing the seed industry and advancing agricultural science and technology, and for supporting eligible seed enterprises in accessing capital through IPOs, over-the-counter listings, and refinancing. Meanwhile, the special initiative to consolidate and expand the effectiveness of financial assistance emphasizes continuing to implement differentiated financial support policies for key assisted counties, maintaining robust credit provision in formerly impoverished areas, and exploring and formulating a normalized mechanism for financial assistance after the transition period concludes.

  At the same time, the Notice emphasizes leveraging the incentive effects of monetary policy tools such as re-lending and re-discounting for agriculture and small businesses, as well as re-lending for technological innovation and industrial upgrading, to encourage financial institutions to issue special-purpose financial bonds and support agricultural enterprises in issuing financing instruments, thereby continuously increasing funding for key areas of rural revitalization. It also calls for strengthening coordination among industrial, fiscal, and financial policies to ensure smooth linkages in government–bank–enterprise financing matchmaking services. All financial institutions are required to continually refine their service mechanisms, tilt resources toward county-level areas, and better meet the diversified financial needs of various agricultural entities.

  In recent years, financial resources have been increasingly directed toward the agriculture‑related sector, with agricultural loans exhibiting a trend of “expanded total volume, rising share, and declining interest rates.” As of the end of May 2024, the outstanding balance of agricultural loans stood at RMB 60 trillion, up 12.1% year on year—3.1 percentage points faster than the overall loan growth rate.

  From a structural perspective, as of the end of May, agricultural-related loans accounted for 25% of total outstanding loans, up 2.1 percentage points from the end of 2021. In the first five months, new agricultural-related loans totaled RMB 3.6 trillion, representing 31.4% of the overall increase in loans—6.8 percentage points higher than the full-year level in 2021.

  The People’s Bank of China stated that, going forward, it will further strengthen communication and cooperation with the National Administration of Financial Regulation, the China Securities Regulatory Commission, the Ministry of Finance, the Ministry of Agriculture and Rural Affairs, and other relevant departments; draw on the experience of the “Ten‑Million Project”; promptly summarize the practices and outcomes of financial services supporting rural revitalization; enhance statistical monitoring and performance assessment; ensure the thorough implementation of the five major initiatives; and continuously improve the capacity and quality of financial services to contribute to the comprehensive revitalization of rural areas.

[Editor-in-charge: Yang Meng]

Source: Economic Information Daily