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The picture shows the appearance of the People’s Bank of China in Beijing.Image source: Xinhua News Agency
The People’s Bank of China on Sunday established a technological innovation transformation re-loan program aimed at increasing financial support for technological transformation and equipment updates of small and medium-sized enterprises. high-tech field.
The People’s Bank of China said the tool would support a new round of large-scale equipment refreshes and trade-ins of consumer goods, which was deployed in an action plan released by China’s State Council on March 13.
Analysts said the new tool reflects full support for technology-based small and medium-sized enterprises in the early stages of growth. This move reflects financial support for the digitalization, intelligence, high-end, green transformation and equipment upgrading of key industries, and will promote the development of high-quality new productive forces in our country.
The program is earmarked for 500 billion yuan ($69 billion), with an annual interest rate of 1.75% and a one-year refinancing period, according to a notice issued by the People’s Bank of China on Sunday.
The funds will be distributed to 21 financial institutions. The central bank stated that after conducting operational risk assessments, financial institutions can independently decide whether to grant loans and set re-lending conditions based on corporate applications.
The re-loan plan will guide financial institutions to provide credit support to high-tech small and medium-sized enterprises in the growth stage, as well as digital, intelligent, high-end, green technological transformation and equipment renewal projects in key areas. The central bank stated that it is based on independent decision-making and risk-taking.
Yang Chang, chief analyst at Zhongtai Securities Research Institute, told the Global Times on Sunday that the targets for refinancing are clear, including technology-based small and medium-sized enterprises, as well as technological transformation and updating projects in key areas of equipment.
Yang pointed out that under the People’s Bank of China’s new project financing, loan interest rates are more favorable. The refinancing interest rate is determined to be 1.75%, which is significantly lower than the latest quoted one-year loan preferential interest rate of 3.45%.
“The refinancing tool is also a concrete implementation of the deployment of the Central Financial Work Conference and the Central Economic Work Conference to prioritize technological innovation,” Yang said.
The Central Economic Work Conference held in December 2023 pointed out that financial institutions are encouraged to strengthen support for technological innovation, green transformation, inclusive finance for small and micro enterprises, and the digital economy. release.
In March this year, the People’s Bank of China announced the establishment of a re-loan mechanism for technological innovation and technological transformation during the two sessions.
Analysts said the new refinancing mechanism is in line with China’s key policy agenda – the trade-in of consumer goods and large-scale equipment renewal – aimed at boosting consumption from both supply and demand sides. Several departments have recently announced new rules or launched action plans.
On Wednesday, China’s financial regulators jointly announced the lifting of regulatory caps on auto loans for self-use internal combustion engine vehicles and new energy vehicles, allowing zero down payments for cars to facilitate trade-in of old cars for new ones. automotive industry.
On April 2, the National Development and Reform Commission held a discussion with six private enterprises to discuss the trade-in work and included it in the policy roadmap. Economic planners encourage private companies to participate in trade-in programs to stimulate consumption.
Pan Helin, a member of the expert committee, said that the focus of China’s economic work is still technological transformation and upgrading, that is, improving industrial productivity levels through science and technology, that is, new high-quality productivity, new industrialization forms and other industrial upgrades. The Information and Communications Economics Department of the Ministry of Industry and Information Technology told the Global Times on Sunday.
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