21st Century Business Herald:

Currently, small and micro enterprises are showing an uneven recovery. In terms of financial support for private enterprises, what further measures can be taken to better stimulate the development of business entities? Thank you.

Zhu Hexin:

Thank you for your question. Just now, Governor Pan Gongsheng announced two important measures that directly benefit the development of our private economy. Supporting the development of the private economy has been the consistent policy of the CPC Central Committee, and the private economy is an essential component of our economic system. The private economy is characterized by its large volume and extensive coverage, encompassing various aspects related to the national economy and people's well-being. Therefore, we must spare no effort in supporting its development. The private economy plays a crucial role in stabilizing growth, improving people's livelihoods, promoting entrepreneurship, and increasing job opportunities. The private economy is of high importance – a few years earlier, it had accounted for more than 50% of tax revenue, more than 60% of GDP, more than 70% of technological innovation achievements, more than 80% of urban employment and more than 90% of enterprises. 

In our financial services for the real economy, the private economy is an important field. Therefore, the People's Bank has made significant and effective efforts in this regard. On one hand, it is about how to implement this concept. As everyone knows, according to the requirements of the central authorities, we have always upheld and improved China's fundamental socialist economic systems and worked unswervingly both to consolidate and develop the public sector and to encourage, support, and guide development of the non-public sector. We see the private economy as equal to the public economy and treat private enterprises the same as state-owned enterprises. On the other hand, it is not just about the concept but also about putting it into action. This involves effectively implementing our financial policies through financial institutions. The most pivotal part is how to fully dedicate ourselves to implementing measures in the private economy and promote the private economy as a vital production force and a significant source of growth. In this regard, we have achieved significant results. Previously, there were concerns about the difficulties and high costs of financing. However, in reality, we have made significant progress in recent years. Here, we can use a set of data to illustrate the achievements we have made in serving the private economy. By the end of last year, outstanding loans to privately owned enterprises exceeded 41.2 trillion yuan, with an increase of 3.8 trillion yuan for the entire year. This represents a year-on-year increase of 950 billion yuan. The number of private enterprises that were granted credit lines reached 7.16 million, with an increase of 1.16 million for the entire year, marking a year-on-year increase of 80,000. In November, the weighted average interest rate for newly issued loans to privately owned enterprises was 4.24%, which decreased by 23 basis points compared to the same period in the previous year.

This time, everyone also noticed the central financial work conference's emphasis on the five priorities of technology finance, green finance, inclusive finance, pension finance, and digital finance. These five priorities are closely related to the private economy and private enterprises. Therefore, when carrying out these tasks, we must pay more attention to providing financial support for the development of the private economy. The People's Bank will primarily focus on the work in the following areas:

First, we will focus on the implementation of policy incentives. We will continuously improve policy tools. To start with, the People's Bank has announced significant positive news and two major measures. These two measures are part of our policy toolbox. Who will implement them? Financial institutions. What should financial institutions do? We must make every effort to promote the implementation of policies, fulfilling the aspirations of financial institutions and the requirements of private economy development. For example, by effectively integrating aspects, such as due diligence and exemption from accountability, and performance examination, we can ensure that our policy tools play a greater role.

Secondly, we will enhance our service capabilities, with a primary focus on financial institutions. Through the utilization of technology and the dismantling of information barriers, we can address certain gaps in supporting the private economy and enterprises. Specifically, issues such as credit loans and initial funding requirements for private enterprises can be resolved through technological empowerment and shared information.

Thirdly, we will ensure diversification of fund sources. This involves traditional credit support as well as direct financing markets such as bonds, a domain in which the PBC has made significant strides. It is noteworthy that technology companies also require support from the capital market. Meanwhile, it's worth noting that there is a significant presence of technology-oriented private enterprises within the private sector, a focus area for the PBC. On one hand, there is an emphasis on increasing loans to tech-focused businesses and issuing innovation and technology-related financing instruments, aiming to support private enterprises in boosting their investments in technology and research and development. The second aspect involves collaborating with relevant enterprises and departments to promote the smooth flow of various stages in the venture capital industry, including fundraising, investment, management, and exit processes for equity investment. This is aimed at delivering high-quality services for the development of early-stage private technology enterprises. To sum up, the private economy and private enterprises hold great importance, and financial institutions and enterprises should step up to play a more substantial role. Thank you.