China vows more support for private sector buffeted by slowdown

The skyline of Shanghai's Lujiazui Financial District of Pudong, on Nov 13, 2018.
The skyline of Shanghai's Lujiazui Financial District of Pudong, on Nov 13, 2018.PHOTO: AFP

BEIJING (BLOOMBERG) - Chinese policy makers will step up support for the struggling private sector in 2019, with the State Council or Cabinet announcing a series of measures for the firms, which have been hit hard by the slowing economy and trade tensions.

The central bank will improve policies on targeted reserve-requirement ratio cuts and inclusive finance to further support private companies, according to a statement after the State Council meeting on Monday (Dec 24).

There will also be more tax cuts, and faster review of private companies' IPOs and refinancing applications, the statement said.

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The measures are the latest in a series of steps to help private firms, and come after the government last week said it would increase stimulus in the new year. The central bank also indicated a "low-profile" rate cut to boost lending to the private sector.

President Xi Jinping has put his personal stamp on the campaign, proclaiming "unwavering" support for private businesses. This support has meant less focus on the deleveraging campaign, which had led to less credit for smaller businesses.

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The meeting, which was chaired by Premier Li Keqiang, also decided to encourage asset management products and insurance funds to participate in reducing risks associated with stock-pledge loans to privately-owned companies.

Policy makers also vowed to treat all enterprises equally in bidding and land-use decisions, no matter their size or whether they are state- or privately-owned, based on the principle of competition neutrality.

The statement also reiterated that the government will protect the personal property of private entrepreneurs based on the law.