China to increase financial support for industrial upgrade
China will increase financial support to its industries as they are being encouraged to transform themselves amid the country's industrial upgrades, an official document said on Tuesday.
China will expand credit to industrial enterprises, make capital and insurance markets more helpful and innovate in corporate financing system, according to a guideline jointly released by eight economic regulators including the People's Bank of China.
Improved financial services will push forward supply-side reform, facilitate overcapacity reduction, accelerate de-stocking and reduce corporate burdens, the guideline said.
The authorities will implement a differentiated strategy targeting different sectors and areas, the guideline said.
The development of emerging sectors and upgrades of traditional ones will receive more support, and financial institutions will be encouraged to make long-term loans to high-tech firms, technical equipment manufacturing and some basic industries.
However, loans to "zombie companies" that have suffered continual losses and are unable to pay back their debts will be slashed or withdrawn, according to the guideline.
To facilitate industrial consolidation, China will widen financing channels for mergers and acquisitions, such as allowing firms to issue preference shares and convertible bonds.
The regulators also promised stronger support for companies exploring foreign markets. Companies will be encouraged to go public, issue bonds and increase asset securitization on overseas markets, use more yuan-denominated outbound lending and make overseas investment in yuan.
China will pursue a steady credit increase, keep liquidity at a proper level and maintain a stable monetary market, the guideline said. (Souce: Chinadaily.com)
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