Shou Xiaoli:

The last question. 

Red Star News:

My question is about micro and small businesses. The development of such businesses affects the national economy and people's livelihood while contributing to the resilience of the economy and employment. What the financial sector has done in recent years to facilitate such businesses, and how is the effect? What kind of measures will be taken next to better support and serve such businesses? Thank you.

Chen Yulu:

I will answer this question. This question is asked almost every time when I participate in news conferences hosted here. This shows people are deeply concerned with the difficulties and high costs of financing of micro and small businesses. The PBC and other financial regulatory departments have made continued efforts to tackle this issue in recent years. And we may say that we have made great progress and achieved remarkable results. 

As you just mentioned, micro and small businesses are a dynamic force driving the development of China, a major way of securing employment, and a key player in innovation. Since the 18th CPC National Congress, the PBC, along with other financial regulatory departments, has earnestly implemented the decisions and arrangements of the CPC Central Committee and the State Council, made the service for such businesses a top priority, made serious efforts in the planning and design of supportive financial measures, and improved the policy framework. In summary, we have taken on four major tasks: 

First, innovative tools, or innovative structural monetary policy tools, have been an effective driving force. In particular, the PBC launched two direct tools to tackle the pandemic's huge impact on micro and small businesses. The amount of deferred repayments of principal and interest of loans taken out by micro, small and medium businesses has reached 13.1 trillion yuan, and the amount of inclusive credit loans taken out by micro and small businesses has reached 10.3 trillion yuan. 

Second, the financing costs of micro and small businesses have been reduced by deepening the market-based interest rate reform. Since 2013, the PBC has eased regulation on loan and deposit interest rates, established and refined the mechanism for setting the LPR, and pushed for reducing the financing costs of the real economy. The interest rate of loans newly issued in April to micro and small businesses was 5.13%, lowering by nearly 1 percentage point over the past five years. 

Third, a long-term mechanism has been established for financial institutions to serve micro and small businesses, with a focus on tackling difficulties and bottlenecks. We pushed financial institutions to set up inclusive financing departments, improved the mechanism for inclusive financing to be conducted by specialized institutions, pushed for the establishment of provincial-level credit platforms in most provinces, and pushed for the shared use of credit information of micro and small businesses. The coverage of financing of micro and small businesses have extended remarkably. As of the end of April, 51.32 million micro and small businesses have accessed inclusive credit granting, accounting for one-third of all market entities. 

Fourth, the channels for diversified financing have been broadened so as to improve the availability and convenience of financing of micro and small businesses. As of the end of April, a total of 1.78 trillion yuan in financial bonds have been issued with the aim of facilitating such businesses. The accounts receivable financing service platform has supported micro, small and medium businesses through 280,000 financing deals, with the amount totaling 12.5 trillion yuan. 

The difficulties and high costs to access financing for micro and small businesses have been tackled through common effort and remarkable results have been achieved. As of the end of April, the balance of micro and small business loans nationwide was 38.8 trillion yuan, 3.35 times that at the end of 2012.  

Going forward, the PBC will stay committed to consolidating and developing the public sector of the economy and to encouraging, supporting, and guiding the non-public sector of the economy. We will continue to offer supportive policies at an earlier time and with moderately enhanced efforts. We will systematically build a long-term mechanism so that financial service providers are confident, willing, able and efficient to grant loans to micro and small businesses. With these efforts, the continued and healthy development of the national economy will be boosted. Thank you. 

Shou Xiaoli：

Thank you for the speakers and the journalists. Today's news conference is concluded.  

Translated and edited by Zhang Liying, Wang Qian, Guo Yiming, He Shan, Cui Can, Yuan Fang, Zhang Tingting, Liu Sitong, Zhang Rui, Liu Qiang, Wang Yiming, Xu Kailin, Huang Shan, Li Xiao, Ma Yujia, Yang Xi, Wang Wei, Zhu Bochen, Zhou Jing, Li Huiru, David Ball, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.