Lenders step up efforts to serve real economy

A bank staff member (right) inquires about the use of loan funds at a textile factory in Haian, Jiangsu province, in December. [PHOTO/CHINA DAILY]

China's commercial and policy banks have been ramping up efforts to better serve the real economy, through investing in technology finance, green finance, inclusive finance, pension finance and digital finance, according to bank executives.

Experts said going forward, they are expected to play a more positive role, as the country endeavors to build a strong and efficient financial industry so as to empower its high-quality growth and modernization drive.

The annual work conference of the National Financial Regulatory Administration, which was held on Jan 30, called for the financial system to stay committed to a path of financial development with Chinese characteristics and boost the high-quality development of the financial sector.

The meeting stressed that the financial sector should provide precise and efficient services, and coordinate the development of technology finance, green finance, inclusive finance, pension finance and digital finance.

The financial sector can better serve the development of new quality productive forces and the construction of a modern industrial system by focusing on supporting effective demand expansion, enhancing inclusive financial services, and improving the quality and efficiency of consumer protection, according to the meeting.

Optimized credit structure

Data from the People's Bank of China, the country's central bank, showed that outstanding renminbi-denominated loans reached 237.6 trillion yuan ($33 trillion) at the end of 2023, up 10.6 percent year-on-year. New loans in 2023 totaled 22.75 trillion yuan, 1.31 trillion yuan more than in the previous year.

Moreover, the credit structure continues to be optimized. As of the end of 2023, outstanding inclusive loans for small and micro enterprises increased 23.5 percent year-on-year, and the corresponding growth figures for "little giant" enterprises and technology-based small and medium-sized enterprises were 18.6 percent and 21.9 percent, respectively.

Outstanding medium- and long-term loans for the manufacturing sector increased by 31.9 percent year-on-year, and those for high-tech manufacturing increased by 34 percent.

Dong Ximiao, chief researcher at Merchants Union Consumer Finance, said that since last year, financial institutions have strengthened their support for the real economy, giving more financial resources to key areas and weak links such as technological innovation, infrastructure, private small and micro-sized enterprises, and green development.

"The central bank data showed that credit structure is continuously improving, and efficiency of financial resource allocation is on the rise," Dong said.

China Development Bank said it aims to better serve China's infrastructure construction by investing more financial resources and improving service quality and outcomes.

As of the end of November, CDB's outstanding loans for infrastructure projects exceeded 7.7 trillion yuan.

Liu Peiyong, chief business officer of the bank, said that CDB has promoted in-depth cooperation between high-tech and financial sectors, to facilitate the construction of major science and technology infrastructure such as the industrial internet, artificial intelligence computing centers and national key laboratories, helping develop strategic emerging industries.

CDB has also striven to support green and low-carbon development in sectors including energy, transportation, urban and rural construction, as well as environmental infrastructure construction.

With respect to the inclusive financial sector, CDB has provided special loans for farmland construction.

As of the end of November, it had issued a total of 25.8 billion yuan in such loans, which are expected to help develop 300,000 hectares of high-standard farmland. It has also contributed to the building of a "beautiful countryside" by supporting key projects, including waste management and sewage treatment, public toilets, and habitat improvement, Liu added.

Liu said this year, CDB will continue to serve the country's high-quality development. It will help accelerate the implementation of an innovation-driven development strategy, and further contribute to some key green financial projects.

The booth of China Development Bank is seen during the 2023 China International Fair for Trade in Services in Beijing in September. [PHOTO/CHINA DAILY]

It will also promote rural vitalization in all respects and consolidate the gains from poverty alleviation campaigns, as well as provide financial services for the construction of elderly care infrastructure. CDB's digital transformation will be accelerated to strengthen its ability to serve the digital economy.

Industrial and Commercial Bank of China has made remarkable progress in promoting high-quality development of green finance, said Li Duo, main head of the bank's credit and investment management department.

Li said ICBC's green loan balance currently ranks tops in the industry, with the influence of its green finance brand - "ICBC Green Bank+" - continuing to increase.

Global index and analytics company MSCI raised ICBC's environmental, social and governance rating to AA in 2023, a first for the Chinese mainland.

Li said ICBC has promoted the green transformation of its financial services in an orderly manner. It has adjusted its investment and lending plans, giving strong support to green industries, and has incorporated indicators such as companies' energy consumption into the selection criteria of customers and projects. It has also created customized policies based on the projects' pricing, scale and other characteristics.

The bank has also actively innovated and developed new green financial products. By the end of 2023, it had issued a total of $19.9 billion in green financial bonds overseas and 80 billion yuan at home.

Meanwhile, ICBC has striven to promote global cooperation in the green financial sector. It is the only Chinese-funded institution that participated in the drafting of the United Nations' Principles for Responsible Banking, Li said.

Bank of Jiangsu's Vice-President Luo Feng said the bank is providing strong support for small and micro enterprises, and this has been highly appreciated by the regulatory authorities. It had issued over 620 billion yuan in loans to small and micro enterprises as of the end of 2023, ranking first among China's city commercial banks. Of these, nearly 170 billion yuan were inclusive loans.

The bank has made more credit resources available for small and micro enterprises, and has further expanded the scope of its financial services, said Luo.

The bank has also developed an online financing platform and new loan products to specifically serve micro enterprises and self-employed households with financing needs of less than 1 million yuan each.

Luo said the bank has used financial technology to constantly improve service quality and user experience. It has developed a "one-stop" smart product that enables online applications, approvals and disbursement of loans, and has launched digital platforms that provide small and micro enterprises with comprehensive services such as wealth management and policy consultation.

Bank of Jiangsu has also strictly implemented both national and local policies to reduce the burden and increase efficiency of enterprises. It has lowered the inclusive loan interest rates for small and micro enterprises and paid for enterprises' collateral appraisal fees and property insurance fees. Meanwhile, it has launched products to help enterprises set up flexible repayment plans.

Chang Haizhong, executive director of corporates at rating agency Fitch Bohua, said it is the "paramount mission" for the financial sector to support the development of the real economy, and that the distribution of financial resources must be in line with the strategies of the nation.

"The authorities have further clarified the key directions for the allocation of financial resources, namely, technological innovation, advanced manufacturing, green development, and small and medium-sized enterprises," he said.

"This is also the essential path for China to achieve independent innovation, industrial upgrading and the carbon objectives, and thereby achieve high-quality development."

The central financial work conference, held in October, said that the financial sector must solve problems including low efficiency, hidden economic and financial risks, and relatively weak supervision and governance capacity, to provide high-quality services for economic and social development.

The meeting urged to create an enabling monetary and financial environment, while stepping up quality financial services for major strategies, key areas and weak links.