China Daily:

This year marks the start of the 14th Five-Year Plan. What measures are the banking and insurance sectors taking in terms of serving innovation-driven strategies, developing technological finance and supporting strategic emerging industries? What do you plan to do next? Thank you.

Guo Shuqing:

I would like to invite Mr. Zhao Huan, chairman of CDB, to talk about this issue. As we have just discussed, the development bank is involved in development finance. It is very courageous, doing business that others haven't, so its development business is pioneering. However, since the investment risks in the technology and innovation industries are very high, I asked him about how to manage the risks of investment loans. Since we do not have special policies for CDB, it has to achieve business sustainability on its own terms. So, I'd like to invite Mr. Zhao to answer this question.

Zhao Huan:

Thank you for your question. And thank you Mr. Guo for providing this opportunity to introduce the current situation, which demonstrates how development finance has served science and technology innovation and innovation-driven development.

In recent years, in order to implement the new development concepts, under the guidance and support of CBIRC and other departments, CDB has vigorously developed technological finance and served innovation-driven development, achieving positive results.

First, we have given our full support to major science and technology innovation projects. In 2020, we issued a total of 149.4 billion yuan in loans to support science and technology, which is an increase of 23% year on year. We have served a series of major scientific and technological projects, in such areas as integrated circuits and commercial aircraft, assisting new breakthrough achievements in core technologies within key areas.

Second, we have actively supported the development of strategic emerging industries and advanced manufacturing industries. In 2020, we issued 330.4 billion yuan in loans to strategic emerging industries, and issued 265.9 billion yuan in medium- and long-term loans to manufacturing industries, representing an increase of 37% year on year, which is a record high.

Third, we have vigorously supported investment in the integrated circuit industry. CDB's subsidiary companies have successfully completed the first phase investment for the national integrated circuit industry investment fund, and supported the rapid development of key enterprises in the integrated circuits industry, with the investment achieving a remarkable economic effect. We have been operating on a market-oriented basis. Last year, the value of technology companies increased significantly, and the funding investment also achieved a significant economic effect. The market-oriented operation was very successful. At the same time, we have also participated in setting up the second phase investment for the national integrated circuit industry investment fund, and raised a total of 200 billion yuan. The fund has now entered the investment phase.

This year marks the first year of the implementation of the 14th Five-Year Plan. CDB will earnestly implement the major decisions and deployments made at the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference. We will continue to support technological finance, provide services to make the science and technology industry more self-reliant, and better serve the innovation-driven development strategy. Our work will cover four measures:

First, we will set up special loans to serve and strengthen the national strategic science and technology capabilities. We will synergize with the 10-year action plan for national basic research, the strategic science and technology plans, and the construction of major national science and technology projects, laboratories, science and innovation centers. We will set up special loans for scientific and technological innovation and basic research, and plan to issue more than 50 billion yuan in special loans for major scientific and technological projects this year.

Second, we will continue to provide more credit resources and support the high-quality development of strategic emerging industries and advanced manufacturing industries. Starting this year, we are planning to launch special financial activities as part of the "Bailian Qianqi" program. We will select a hundred leading enterprises in the field of science and technology innovation and a thousand of their key upstream and downstream industrial chain businesses to provide special financial services. We are also planning to arrange more than 400 billion yuan in loans for strategic emerging industries and advanced manufacturing industries.

Third, we will increase equity investment and offer services for modernizing the industrial and supply chain. We will apply the industrial investment funds and science and technology innovation funds managed by the CDB and continue to increase equity investment in integrated circuits, advanced manufacturing, and science and technology innovation. We are planning to increase the equity investment by over 50 billion yuan.

Fourth, we will create new models for technological finance and provide effective support for innovation-driven development. We will use a combination of multiple financing models, including equity investment, credit loans, structured financing and "debt financing plus investment options," to support innovation-driven development. In addition, we will play a guiding role in partnering with other financial institutions to integrate various resources and social capital, and are planning to increase the intensity of serving innovation-driven development through syndicated loans, joint loans and joint investment.

Finally, I would like to thank you again for your interest in technological innovation-driven development and development banks. Thank you.