City rolls out measures to bolster economy

Shanghai launched 18 targeted measures on Wednesday to further improve financial support to enterprises, reduce corporate funding costs and stabilize the local economy.

The Guiding Opinions were formulated by the Shanghai headquarters of the People's Bank of China, together with the Shanghai Bureau of the China Banking and Insurance Regulatory Commission, the Shanghai Financial Regulatory Bureau, the Shanghai Commission of Economy and Informatization and several other departments.

Measures include increasing monetary policy incentives, strengthening direct and indirect financing, reducing the financing costs of small and micro enterprises and implementing tax and fee reductions for businesses.

About 12 billion yuan (US$1.69 billion) of special bail-out loans will be set aside for enterprises, and cooperation between local governments and banks will be deepened.

Shanghai Pudong Development Bank, Bank of Shanghai and Shanghai Rural Commercial Bank are encouraged to grant preferential loans to qualified enterprises, and the loan interest rate shall be reduced by at least 25 basis points with reference to the loan prime rate during the same period.

The loan prime rate was introduced by the central bank in August, 2019 and is the only benchmark rate for banks' new lending. Lenders and their clients can negotiate a floating rate higher or lower than the benchmark.

Financial institutions are encouraged to set up loan renewal service centers, and increase the loan renewal ratio of small business.

The Guiding Opinions also emphasize increasing support in key areas such as foreign trade and giving full play to the role of insurance guarantee.