China wrestles its slowdown
Posted by Houses and Holes in China economyon Oct 14th, 2011 | 4 comments
So, after some concerns and worries, the Chinese government has responded with new measures to try to solve the growing problem of tight financing for small and medium sized businesses. I would describe these measures rather as the” how to stop crazy bosses from running away because they have borrowed from loan sharks” policies.
Following a meeting in the State Council, Premier Wen Jiabao announced six new measures to support small business:
The more important 4 points of the 6 are:
- Increase small businesses’ access to credit from banks, with growth of credit to small businesses not lower than the overall loan growth
- Banks should scrap unreasonable fees charge to small businesses to reduce costs of running small businesses
- Explore more channels for small businesses to obtain credit
- Refine differential regulatory structure for small businesses. Loans of the size below CNY5 million could be excluded in the calculation of of loan-to-deposit ratio, and would allow banks to use the same risk-weighting as retail loans
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