Compliance News / Compliance

China Focuses on Small Business Financing

Loan Growth Rate should Match that for Larger Companies

July 17, 2013
/ Print / Reprints /
/ Text Size+

China wants to improve financial services for small and micro-sized businesses, allowing them access to services similar to those of larger firms. Those firms account for 60 percent of China’s gross domestic products and half its total tax revenue, but receive only slightly more than 20 percent of the country’s loans.

Specifically, China wants to ensure that the growth rate of loans to its smallest businesses is commensurate to that of the total lending from commercial banks, and no less than last year’s increase. Chinese Vice Premier Ma Kai Ma recently encouraged commercial banks to be innovative in providing tailor-made services for small businesses and to enhance information services for those companies. He also called for developing small financial institutions, lowering financing costs and improving policy support for small businesses. At a meeting Monday, he said, "Financial services for small and micro-sized enterprises have been constantly improving in recent years, but it still lags far behind the development needs of those companies," according to China’s state news agency, Xinhua.

Access to financing is seen as a major factor in economic development, enabling companies to grow and attract international trade and investment. It also may open the Chinese services industry a fraction, increasing the potential for eventual involvement for international financial institutions. 

China is trying to revamp its financial system as it flirts with internationalizing its currently and allowing the development of local banks. Meanwhile it is trying to boost an economy whose growth rate fell to 7.5 percent this quarter, down from 7.7 percent during the first quarter of 2013. The goal is to stimulate growth through consumption. 

In June, China’s central bank withheld money from the interbank market in an attempt to slow credit growth as it attempts to develop an economy less reliant upon government financing. The move spiked short term credit rates in June from the usual 3 to 4 percent range to a high of 11 percent before the bank rethought its position and rates fell to about 4 percent. 

You must login or register in order to post a comment.



Image Galleries

KC SmartPort Momentum

Kansas City SmartPort Momentum 2013 focused on 3PLs, the issues facing the industry, and the role or logistics in economic development


Assurance of Supply: A Top Concern for Manufacturers

Every manufacturer has an assurance of supply problem to some extent due to the complexity of global sourcing. For years, manufacturers were blessed with high margins but margins have grown paper thin. You can’t fill up your distribution centers with excess inventory – not only is there a cost factor but the pace of business and consumer buying trends causes goods to quickly turn obsolete. Assurance of supply provides the speed and agility that is essential to being able to compete in today’s market.


Speaker info: Diane Palmquist, VP Manufacturing Industry Solutions


More Podcasts

World Trade 100 Magazine

wt september 2014

2014 September

Check out the September 2014 edition of World Trade WT100, featuring the 2014 Logistics Directory, plus much more!
Table Of Contents Subscribe

Transportation Capacity

As peak season has gotten underway, what is your experience with transportation capacity?
View Results Poll Archive


World-Class Warehousing and Material Handling, 1st Edition

Filled with proven operational solutions, it will guide managers as they develop a warehouse master plan, one designed to minimize the effects of supply chain inefficiencies as it improves logistics accuracy and inventory management - and reduces overall warehousing expense.

More Products

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

Use our interactive maps to locate service providers across North America.Interactive Map

Logistics Development Partners 

IWLA Members