Official: Efforts to ensure stability and ‘six priorities’ will be ramped up

Micro and small businesses that play a key role in sustaining economic growth will be given more financial assistance, while more measures will be enacted to bolster the economy and deal with the COVID-19 uncertainties, officials and experts said on Thursday.

Guo Shuqing, Party secretary of the People’s Bank of China, the central bank, said the country’s financial sector will make a big push in the second half of this year to boost the real economy, with a key focus on facilitating the development of micro and small business as well as the capital market.

During the first half of this year, the proportion of direct financing, which combines equity and bond financing, increased from 32 percent to 36 percent.

“We hope to keep the momentum going and further increase direct financing to support enterprises,” said Guo, who is also chairman of the China Banking and Insurance Regulatory Commission, in an interview with China Central Television.

In the second half of this year, the government will continue to ramp up efforts to ensure “six priorities” and stability in six areas for steady economic momentum, with a key focus on protecting market entities and ensuring employment, Guo said.

Tang Jianwei, chief researcher at the Financial Research Center of Bank of Communications Co Ltd, expects the government to adopt a more proactive and effective fiscal policy and a more prudent monetary policy to ensure that funds are deployed to the governments at the prefecture and county levels and directly benefit businesses.

“The key focus is to increase support to boost the real economy, take targeted measures to facilitate the development of hard-hit micro and small enterprises, and support people in need,” Tang said.

Guo said more efforts will be made to significantly reduce the overall financing costs of enterprises, increase medium and long-term funding for advanced manufacturing and strategic emerging industries, better coordinate financial policies with the policies on employment, industries and regions, and increase financial support for enterprises that have great potential but are facing temporary difficulties.

“The service industry is yet to return to normal operations and we are taking some special measures to rectify the same, such as providing emergency loans and emergency financing,” Guo said.”We are carrying out pilot projects in some provinces and we believe we will do a better job in the second half of this year.”

Yang Ruilong, a professor of economics at Renmin University of China in Beijing, said: “To spur the economy amid the mounting downside pressure and disruptions from the novel coronavirus outbreak, the government needs to not only introduce supportive policies but also foster a better business-friendly environment and stimulate the vitality of enterprises.”

Yang said during a recent macroeconomic forum in Beijing that the government should take key measures to ensure that more funds flow to the real economy rather than the capital market.

Jiang Xueqing contributed to this story.

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