Economic Daily:
At present, China faces increasing downward pressure on economic growth and some enterprises have even faced difficulties in their operations. Against this backdrop, what concrete measures have been taken by banking and insurance agencies to support the real economy, and how can profitability and gain for enterprises be increased? Thanks.
Zhu Shumin:
Under the current circumstances where economic growth is slowing in our country, the China Banking and Insurance Regulatory Commission has taken the initiative to motivate banks and insurers to continuously strengthen their support in the key areas and weak links in China's economic and social development. It is also urging them to help fulfill the effective financial needs of the real economy and to help ensure stability in employment, financial operations, foreign trade, foreign investment, domestic investment, and expectations. In 2019, the banking industry witnessed an increase of 17 trillion yuan in loans, which marked a year-on-year growth of 1.1 trillion yuan. The insurance industry provided about 6,470 trillion yuan in insurance for the entire nation, and claims and payouts totaling 1.29 trillion yuan. These are the main areas of our work:
First, in the transition period when new economic growth drivers are replacing the old ones, efforts have been made to provide better financial services for high-quality economic growth, to strengthen financial support to the advanced manufacturing industry, strategic emerging industries and low-carbon circular economies, and to promote industrial transformation and upgrading. By the end of last year, loans provided to the manufacturing sector by banks increased by 780 billion yuan compared to the beginning of the year, and the green credit balance of 21 major banks exceeded 10 trillion yuan. In terms of promoting financial services for technology enterprises, over 750 technological branches of banks and specialized technological financial institutions have been set up throughout the country. The outstanding balance of bank loans to technology enterprises exceeded 4.1 trillion yuan, an increase of 24% compared to the beginning of 2019. In addition, strong financial support has been given to the coordinated development between regions and construction of major projects. By the end of 2019, the outstanding balance of bank loans to infrastructure construction reached 29.2 trillion yuan, an increase of 2.8 trillion yuan compared to the beginning of the year. We have also promoted the establishment and launch of various investment plans by insurance agencies. At present, they have supported the Yangtze River Economic Belt and Beijing-Tianjin-Hebei Coordinated Development Project with more than 600 billion yuan and 250 billion yuan in capital respectively.
Second, efforts have been made to effectively alleviate the problems of difficult and expensive financing. We have continuously standardized the fees charged by financial institutions and encouraged banks to provide separate credit lines for inclusive finance. We have also implemented preferential internal pricing for internal capital transfers, increased support for renewals, and increased the proportion of credit loans. As we all know and as has been widely reported last year, by the end of 2019, the outstanding balance of bank loans to small and micro enterprises was 11.6 trillion yuan, marking a year-on-year increase of 25%. The number of enterprises with credit balances was more than 21 million, an increase of 3.8 million compared to the beginning of the year; and the average interest rate of loans granted for first time to small and micro enterprises decreased by 0.64 percentage point compared to the 2018 average.
Third, efforts have been made to continuously strengthen financial services for private enterprises. Adhering to the "two unwaveringly" requirements; which are to unswervingly consolidate and develop the public sector, and unswervingly encourage, support, and guide the development of the non-public sector; banks and insurance agencies are required to be non-discriminatory and equal in their treatment of the different economic sectors. By establishing a mechanism that ensures no one who has fulfilled their duties is held liable, strengthening internal performance assessments and innovating on products and services, we have driven banks to establish a long-term mechanism under which banks dare to, are willing to and able to grant loans to private enterprises. At the same time, by setting up creditor committees and implementing debt-to-equity swaps, we have helped some enterprises overcome their difficulties. At present, there are about 19,000 creditor committees nationwide and 14,000 of them concerning privately-owned enterprises.
Fourth, efforts have been made to support the development of public programs. We have conducted home service financial innovations in ten pilot cities including Beijing, Tianjin and Shanghai to help develop community services such as elderly care, housekeeping and childcare. We have also continued to develop commercial pension insurance and commercial health insurance. From January to September of 2019, the pension annuity insurance and commercial health insurance premiums were 41.5 billion yuan and 567.7 billion yuan respectively. We have also cooperated with the Ministry of Agriculture and Rural Affairs to strengthen support to hog production and deepened the pilot program that uses insurance capital to support small agricultural enterprises. From January to November of 2019, agricultural insurance provided 3.5 trillion yuan worth of risk guarantees for 178 million insured agricultural households and paid 52.5 billion yuan in indemnities to 44 million agricultural households.
As our next step, the China Banking and Insurance Regulatory Commission will, based on the arrangements of the Central Economic Work Conference, focus on developing policies concerning the real economy. These policies will aim to help provide effective financial services, solve the financing problems of private enterprises and small and micro enterprises, and improve the financial services in the manufacturing and social service sectors so as to improve the quality and efficiency of financial services for the real economy. Thank you.
