China's central bank increases support for small and medium-sized businesses

China’s central bank has announced a new set of measures to strengthen financial support for small and medium-sized enterprises (SMEs), aiming to help them navigate external uncertainties and maintain stable operations, according to a senior official at the People’s Bank of China (PBOC).

“The moderately loose monetary policy adopted by the People’s Bank of China helps expand funding available to the real economy, lower financing costs for businesses, especially the SMEs, and enhance their operational stability,” said Ding Zhijie, head of the PBOC’s Research Institute, during the latest episode of China Economic Roundtable, a talk show hosted by Xinhua News Agency.

Ding highlighted that the PBOC has intensified its credit support to smaller firms and taken steps to ease their interest burdens. By the end of April, inclusive loans issued to micro and small enterprises reached 34.3 trillion yuan (approximately 4.77 trillion U.S. dollars), marking an 11.9 percent year-on-year increase—outpacing the overall loan growth.

Financing costs have also declined, with the average interest rate on newly issued corporate loans falling to 3.2 percent in April, 50 basis points lower than the same period last year.

In a further move to boost credit access, the central bank has added 300 billion yuan to its relending quota to support the agricultural sector and small businesses.

Ding also underscored the importance of the entrepreneurship guarantee loan, a policy tool introduced in 2016 to foster job creation and innovation. He noted that the central bank will continue to urge banks across the country to implement the policy more effectively to expand financial support and help stabilize employment.

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