Organization: The central bank has released major benefits, and the property market is on the way to lower down payments and interest rates in response to city policies!

China.com Finance News on April 19: According to the central bank’s official website on April 18, the People’s Bank of China and the State Administration of Foreign Exchange issued 23 measures to fully provide financial services for epidemic prevention and control and economic and social development (hereinafter referred to as the notice) .

The "Notice" pointed out that 23 policy measures were proposed to strengthen financial services and increase support for the real economy from three aspects: supporting the relief of distressed entities, smoothing the national economic cycle, and promoting the development of foreign trade and exports.

Among them, the "Notice" emphasizes the need to implement financial support policies for the real economy. Support local governments to carry out infrastructure investment appropriately and in advance, and ensure the reasonable financing needs of financing platform companies in accordance with laws and regulations. Implement city-specific policies to reasonably determine the minimum down payment ratio and minimum loan interest rate requirements for commercial personal housing loans, support the reasonable financing needs of real estate development companies and construction companies, and promote the stable and healthy development of the real estate market. Guide platform companies to carry out inclusive financial services in compliance with laws and regulations to maximize the benefits to enterprises and the people. Financial institutions are required to implement the "two unwavering principles" and increase the proportion of private enterprise loans in newly issued corporate loans.

In this regard, Chen Wenjing of the China Index Research Institute said that first of all, city-specific policies are the main line of current policies, and many places are expected to continue to reduce down payment ratios and mortgage interest rates.

Since 2022, the real estate market has continued to be at a low temperature, with both supply and demand weak. Home buyers’ confidence in home ownership has not yet been substantially restored. The scale of market transactions has dropped significantly, and real estate companies have insufficient investment willingness. In order to promote the stable and healthy development of the real estate market, the central government has repeatedly emphasized "meeting the reasonable housing needs of home buyers" since this year, and various localities have actively implemented "city-specific policies" to stabilize the market and stabilize expectations.

According to Zhongzhi monitoring, as of now, more than 70 cities across the country have introduced more than 100 real estate policies this year, mainly involving relaxing purchase restriction policies, reducing down payment ratios, issuing home purchase subsidies, canceling sales restrictions, and providing housing companies with financial support, etc. Among them, cities such as Zhengzhou, Lanzhou, Chongqing, Wenzhou, Nanning, Heze, Foshan, and Ganzhou have optimized and adjusted their loan restriction policies. Some cities have lowered the down payment ratio for the first or second set of personal commercial loans; many other cities have lowered mortgage interest rates. On April 14 On the same day, Zou Lan, Director of the Central Bank of China, pointed out in response to a reporter’s question, “Since March, due to weakening market demand, banks in more than 100 cities across the country have independently lowered mortgage interest rates based on market changes and their own operating conditions. Ranging from 20 to 60 basis points."

This "Notice" clearly states that "differentiated housing credit policies should be implemented according to the city, and the minimum down payment for commercial individual housing loans within the jurisdiction should be reasonably determined. ratio and minimum loan interest rate requirements to better meet the reasonable housing needs of home buyers." It is expected that more cities will lower the down payment ratio of commercial loans and mortgage interest rates, optimize the "house subscription loan" standard, and first-home loan interest rates in most cities It is expected to drop to the baseline of 4.6%, and for second homes to 5.2%. The reduction in interest rates will reduce the cost of home ownership for home buyers, release demand for home purchases, and have substantial benefits for the real estate industry.

In addition, due to the recent recurrence of the epidemic in many places, the income of some residents has been affected in the short term. The "Notice" proposes to "flexibly adjust the repayment plan by reasonably delaying the repayment time, extending the loan period, delaying the principal repayment, etc." "Support", this measure is a substantial relief to residents and is conducive to stabilizing current market expectations.

Secondly, financial institutions distinguish between project risks and enterprise group risks, and do not adopt a "one size fits all" approach, which is conducive to high-quality projects receiving reasonable financial support.

According to China Index Monitoring, as of March 31, 2022, the outstanding bond balance of real estate companies totaled 2.64522 billion yuan; the total number of bonds due within one year was 688.87 billion yuan, of which the balance of credit bonds was 330.57 billion yuan. billion, and the balance of overseas debt is 358.30 billion yuan. Real estate companies are still at the peak of debt repayment. According to the latest data, from January to March 2022, real estate development companies had 3.8 trillion yuan of funds in place, a year-on-year decrease of 19.6%, the largest decline in history. Domestic loans fell by more than 20%, and corporate funding pressures continued unabated.

The "Notice" clearly states that "financial institutions must distinguish between project risks and enterprise group risks, increase support for high-quality projects, and not blindly withdraw, cut off, or suppress loans, and do not engage in "one size fits all." Maintain real estate development loans in a smooth and orderly manner."

Since last year, after the risks of some real estate companies became explicit, financial institutions have experienced stress reactions and "risk aversion" sentiment has increased. Once a corporate entity defaults, all project financing will be affected, accidentally hurting the quality of some high-quality projects of real estate companies. Reasonable financing needs further intensify the liquidity risk of enterprises. This time, it is specially proposed that "financial institutions should distinguish between project risks and enterprise group risks", which will help some high-quality projects of risk-taking enterprises to receive reasonable financial support.

Generally speaking, high-quality real estate projects are mostly located in hotspot cities such as first-, second- and third-tier cities, with clear and reasonable debt structures and good repayment capabilities. Financial support for such projects may increase in the future. , thus leading to an improvement in the financial situation of enterprises.

Furthermore, M&A debt financing has been accelerated to accelerate the liquidation of risk-taking companies.

According to Zhongzhi monitoring, since this year, many real estate companies have issued merger and acquisition bonds, directly financing more than 10 billion yuan, and the issuers are mainly state-owned enterprises. At the same time, many real estate companies signed strategic cooperation agreements or memorandums with banks to obtain M&A financing loan lines. In addition, many banks and asset management companies have raised funds by issuing merger and acquisition bonds.

This "Notice" clearly states that "commercial banks, financial asset management companies, etc. must provide M&A financial services for key real estate enterprise risk disposal projects, carry out M&A loan business in a steady and orderly manner, and increase M&A bond financing support We will actively provide financial advisory services for mergers and acquisitions. “In the future, increasing debt financing support for mergers and acquisitions will help speed up the risk elimination of real estate companies that default on their debts.

However, it should be noted that during the industry adjustment stage, real estate companies are generally cautious about mergers and acquisitions. At present, real estate companies’ M&A debt funds are mostly used in cooperative projects. At present, real estate companies have higher requirements for "self-security" and are more cautious about the selection of subject matter and the timing of sales.

There have been frequent favorable policies recently, from the comprehensive "requirement reserve ratio" reduction on the 15th to the central bank's emphasis on "city-specific policies" to implement differentiated housing credit policies on the 18th. The credit environment and regulatory policies in the property market are expected to improve faster, especially Reducing down payments, lowering interest rates, optimizing the identification standards for second homes, etc. will effectively stimulate the release of housing demand. From the perspective of industry development, the demand for home purchases has not disappeared, but the wait-and-see sentiment on the short-term demand side is heavy. It is expected that with the gradual implementation of policies, home buyers’ expectations and home buying confidence are expected to gradually stabilize, and the pace of market recovery still depends on the effective prevention and control of the epidemic. and the implementation of local policies.

The following is the original text of the "Notice":

In order to thoroughly implement the decisions and arrangements of the Party Central Committee and the State Council on coordinating epidemic prevention and control and economic and social development, and to ensure smooth logistics and promote industrial chain supply across the country, According to the requirements of the Chain Stability Conference, on April 18, the People's Bank of China and the State Administration of Foreign Exchange issued the "Notice on Providing Financial Services for Epidemic Prevention and Control and Economic and Social Development" (hereinafter referred to as the "Notice") to support the relief of trapped entities. From three aspects: smoothing the national economic cycle and promoting the development of foreign trade and exports, 23 policy measures were proposed to strengthen financial services and increase support for the real economy.

The "Notice" pointed out that it is necessary to give full play to the dual functions of monetary policy in terms of aggregate volume and structure, and to increase financial support for industries, enterprises, and groups affected by the epidemic. The People's Bank of China will maintain reasonably sufficient liquidity, guide financial institutions to expand lending, and reasonably provide profits to the real economy. Timely increase the amount of re-loans to support agriculture and small and micro businesses, make good use of the inclusive small and micro loan support tools, provide incentive funds based on 1% of the incremental balance of inclusive small and micro loans from local legal person financial institutions, and use the credit originally used to support inclusive small and micro businesses The 400 billion yuan re-lending quota of loans will continue to be used on a rolling basis to promote financial resources to be tilted towards enterprises, industries and regions affected by the epidemic. Ensure timely, accurate and direct access of retained tax refund funds, and promote market entities to enjoy policy dividends as early as possible. For the distressed people, financial institutions should flexibly support them by reasonably delaying repayment time, extending loan period, delaying principal repayment, etc. Relevant overdue loans may not be reported as overdue records.

The "Notice" emphasizes the need to implement financial support policies for the real economy. Make good use of the re-loan rediscount and carbon emission reduction support tools to support agriculture, optimize special re-loans to support the clean and efficient use of coal, and make every effort to ensure the stable supply of food and energy. Establish special refinancing for inclusive elderly care to support the financing of inclusive elderly care institutions. Make good use of the entrepreneurial guaranteed loan policy to enrich financial products and services for new citizens. Support local governments to carry out infrastructure investment appropriately and in advance, and ensure the reasonable financing needs of financing platform companies in accordance with laws and regulations.

Implement city-specific policies to reasonably determine the minimum down payment ratio and minimum loan interest rate requirements for commercial personal housing loans, support the reasonable financing needs of real estate development companies and construction companies, and promote the stable and healthy development of the real estate market. Guide platform companies to carry out inclusive financial services in compliance with laws and regulations to maximize the benefits to enterprises and the people. Financial institutions are required to implement the "two unwavering principles" and increase the proportion of private enterprise loans in newly issued corporate loans.

In order to implement the spirit of the National Conference on Ensuring Logistics Smoothness and Promoting Stability of Industrial and Supply Chains, the "Notice" requires that civil aviation emergency loans be fully utilized, the implementation of re-loans for technological innovation be accelerated, and a credit and bond financing docking mechanism be established. , Support the smooth flow of freight and logistics and the stable circulation of industrial and supply chains. Financial institutions should proactively follow up and effectively meet the financing needs of transportation and logistics companies and truck drivers, and provide reasonable loan extension and renewal arrangements for those who have difficulty repaying loans temporarily. For flexible employment entities such as truck drivers, taxi drivers, and online store owners, operating loan support will be increased compared with individual industrial and commercial households and small and micro business owners.

The "Notice" clearly states that the policy to facilitate trade foreign exchange receipts and payments of high-quality enterprises will be extended to the whole country, and a higher level of RMB settlement facilitation and corporate foreign debt facilitation quota pilots will be launched. Domestic foreign exchange loans with a background in trade and export are allowed to be used for foreign exchange settlement. Improve the efficiency of cross-border RMB use by enterprises and improve enterprise exchange rate hedging management services. The China Foreign Exchange Trading Center waives interbank foreign exchange market transaction fees related to foreign exchange derivatives transactions for small, medium and micro enterprises. Increase export credit insurance support.

Since the beginning of this year, the People's Bank of China has increased its liquidity injection. In order to support the accelerated implementation of the tax refund for small and micro enterprises, the People's Bank of China has taken the lead in speeding up the handover of surplus profits to the central government. As of mid-April, it has been handed over 600 billion yuan, mainly used for tax refunds and transfer payments to local governments, which is equivalent to the injection of 600 billion yuan of base currency, which is basically equivalent to the overall RRR cut of 0.25 percentage points. On April 15, the People's Bank of China announced an overall RRR cut of 0.25 percentage points and will invest another 530 billion yuan in long-term funds. Looking at the whole year, the People's Bank of China will hand over a total of more than 1.1 trillion yuan in profit balances, advance the payment schedule, and allocate tax refunds in a timely manner as needed, cooperating with other monetary policy operations to effectively maintain reasonable and sufficient liquidity. Since the beginning of this year, the People's Bank of China has guided market interest rates downward by 0.1-0.15 percentage points, driving the corporate loan interest rate in the first quarter to drop 0.21 percentage points year-on-year to 4.4%, a record low since statistics began. Increase the support of structural monetary policy tools such as re-loans, make good use of re-loans to support agriculture and small businesses and two carbon reduction tools, accelerate the investment of 100 billion yuan in re-loans in the transportation and logistics field, create 200 billion yuan in scientific and technological innovation re-loans and 40 billion yuan in Yuan Puhui pension refinancing is expected to drive an additional 1 trillion yuan in loans from financial institutions.

In the next step, the People's Bank of China and the State Administration of Foreign Exchange will work side by side with relevant departments, local party governments and financial institutions to solidly promote the precise implementation of various policies, release policy dividends as early as possible, and go all out to support overall planning The overall situation of epidemic prevention and control and economic and social development. (End)

Attachment

Notice on epidemic prevention and control and financial services for economic and social development

At the beginning of the outbreak of the new coronavirus pneumonia, in accordance with the Party Central Committee, In accordance with the State Council's decision-making and deployment, the People's Bank of China, together with relevant departments, promptly issued the "Notice on Further Strengthening Financial Support for the Prevention and Control of the Novel Coronavirus Infection Pneumonia Epidemic" (Yinfa [2020] No. 29), proposing 30 measures including monetary credit and financial services. It has provided strong support for epidemic prevention and control and the recovery and development of the real economy. Currently, due to the combined effects of the epidemic and domestic and foreign factors, my country's economic development is facing increased pressure from shrinking demand, supply shocks, and weakening expectations. In order to further provide financial support for epidemic prevention and control and economic and social development, the relevant matters are hereby notified as follows:

1. Give full play to the dual functions of monetary policy in terms of aggregate volume and structure, and increase support for industries and enterprises affected by the epidemic. , crowds and other financial support

(1) Maintain reasonable and sufficient liquidity. Through open market operations, standing lending facilities, re-lending, re-discount and other monetary policy tools, we will provide sufficient liquidity, guide financial institutions to expand loans, and enhance the stability of total credit growth. Give full play to the effectiveness of the reform of loan market quoted interest rates, promote the stabilization and decline of comprehensive financing costs for enterprises, and promote financial institutions to reasonably transfer profits to the real economy. For financial institutions that have been substantially affected by the epidemic, branches of the People's Bank of China may appropriately increase their tolerance for deposit reserve assessments based on actual circumstances.

(2) Provide differentiated financial services to industries that are greatly affected by the epidemic. Make good use of the re-loan and re-discount policies to support agriculture and small businesses, increase the amount of re-loans to support agriculture and small businesses in a timely manner, and guide local corporate financial institutions to increase their support to contact service industries such as accommodation and catering, wholesale and retail, and cultural tourism that have been greatly affected by the epidemic. and other promising industries that are temporarily experiencing difficulties due to the epidemic.

Strengthen information sharing with business, cultural tourism, transportation and other industry authorities, organize and carry out various forms of government-bank-enterprise docking activities, and help banks improve customer acquisition, risk assessment and management and control capabilities , develop chattel mortgage and credit loan products based on the characteristics of enterprises.

(3) Increase financial support for distressed market entities such as small and micro enterprises. Give full play to the role of inclusive small and micro loan support tools. From January 1, 2022 to the end of June 2023, incentive funds will be provided based on 1% of the increase in the balance of inclusive small and micro loans of local legal person financial institutions to encourage financial institutions to stabilize inclusive small and micro businesses. The stock of micro loans will expand increments. The Inclusive Small and Micro Enterprise Credit Loan Support Plan will be integrated into the re-loan management to support agriculture and small and micro enterprises. Starting from 2022, the 400 billion yuan re-loan quota originally used to support Inclusive Small and Micro Enterprise Credit Loans will continue to be used on a rolling basis and can be re-loaned if necessary. Further increase, and guide financial institutions to increase the proportion of credit loans and first-time mortgage households.

Financial institutions should promote the active credit granting and loan-repayment-on-demand model to better meet the funding needs of small and micro enterprises. It is necessary to refine and implement requirements such as internal fund transfer pricing, non-performing tolerance, due diligence and exemption, and performance appraisal, optimize the allocation of credit resources, strengthen financial technology empowerment, and accelerate the improvement of financial service capabilities for small and micro enterprises. It is necessary to actively support distressed enterprises to resist the impact of the epidemic by providing medium and long-term loans, lowering interest rates, extending or renewing loans, etc. in accordance with market-oriented principles, and must not blindly restrict, withdraw or cut off loans. It is necessary to actively connect credit information platforms with enterprise-related credit information in different fields such as finance, government affairs, public utilities, and commerce, so as to alleviate information asymmetry between banks and enterprises and improve financing efficiency.

(4) Improve the quality and efficiency of financial services for key areas and distressed groups. Financial institutions should improve the level of financial supply in areas severely affected by the epidemic by adjusting regional financing policies, internal fund transfer pricing, and implementing differentiated performance appraisal methods.

For those who are hospitalized or quarantined due to COVID-19 infection, those who need to be quarantined for epidemic prevention and control, and those who have temporarily lost their source of income due to the epidemic, financial institutions must promptly optimize credit policies and distinguish between repayment ability and repayment ability. We will differentiate between the short-term repayment ability and the medium- and long-term repayment ability affected by the epidemic, and flexibly adjust the repayment plan by reasonably deferring the repayment time, extending the loan period, delaying the principal repayment, etc. for existing personal housing loans. support. For flexible employment entities such as taxi drivers, online store owners, and truck drivers, financial institutions can increase operating loan support to individual industrial and commercial households and small and micro business owners.

(5) Provide convenient financial market services. Financial market infrastructure must further optimize issuance, trading, clearing, settlement and other services, provide multiple service channels, adjust some business development methods, and strengthen service guarantees. The National Association of Financial Market Institutional Investors, the Interbank Market Clearing House Co., Ltd., and others must use the "green channel" established in the early stage to simplify business processes and moderately relax information disclosure requirements for bond-issuing companies that have been greatly affected by the epidemic. Increase support.

(6) Ensure the smooth flow of basic financial services. Strengthen cash management to ensure cash supply and cash safety and hygiene. Ensure the smooth operation of payment and clearing, relax the business limits of the small-amount payment system as needed, extend the operating time of the large-amount payment system and the central bank's centralized accounting data system, and increase the security of electronic payment services.

When necessary, financial institutions should adopt methods such as working at nearby branches and holding video conferences to handle business approvals and loan lending for enterprises. It is necessary to effectively protect the public's rights and interests related to credit reporting, and continue to implement the relevant regulations that overdue loans affected by the epidemic can not be reported as overdue records. Smooth online consultation and complaint handling channels for financial consumers.

It is necessary to establish a finance-taxation-treasury-bank collaborative working mechanism to ensure smooth channels for fund transfers and ensure that epidemic prevention and control funds are allocated in time. National treasuries at all levels must implement the value-added tax refund policy to help enterprises bail out. Smooth the channels for tax refund fund allocation and refund payment, effectively ensure that tax refund funds reach market entities in a timely, accurate, and safe manner, and promote market entities to enjoy policy dividends as early as possible.

2. Give full play to the role of finance in smoothing the circulation of the national economy, and ensure the implementation of financial support policies for the real economy

(7) Make every effort to provide financial guarantee for food security and the production and marketing of important agricultural products. Make good use of re-lending and re-discount tools to support agriculture, increase re-loan amounts in a timely manner, and guide local corporate financial institutions to increase support for agriculture-related entities. Differentiated credit support measures will be formulated around the entire industry chain including spring plowing preparations and grain circulation, storage, and processing. Give full play to the role of policy banks and ensure the supply of credit funds for central grain reserves in a timely manner. Financial institutions are encouraged to participate in market-oriented grain procurement and proactively respond to financial needs for procurement and processing. Financial institutions should increase credit in the production, purchase, sale, and processing of important agricultural products such as soybeans and oilseeds, and strengthen financial support for key agricultural core technologies such as seed sources.

(8) Provide financial services for coal and other energy supply. Optimize the special refinancing to support the clean and efficient utilization of coal, reasonably meet the needs of coal safety production and construction, coal purchase by power generation enterprises, coal reserves and other fields, and ensure the stable supply of power, coal and other energy sources. We will implement carbon emission reduction support tools and increase support for the transformation and upgrading of large-scale wind power and photovoltaic bases and surrounding coal-fired power plants. While ensuring the security of energy supply, we will also support the transformation of the economy to green and low-carbon.

(9) Increase financial support for smooth logistics and shipping circulation. Financial institutions should proactively follow up and effectively meet the financing needs of transportation companies. Open a "green channel" for transportation and logistics companies that bear heavy tasks of epidemic prevention and control and emergency transportation, optimize the credit approval process, and provide flexible and convenient financial services. For transportation and logistics companies and truck drivers who have temporary difficulty repaying loans due to the impact of the epidemic, financial institutions are supported to provide scientific and reasonable loan extension and renewal arrangements. It is necessary to make full use of civil aviation emergency loans and other tools, and take multiple measures to increase credit support for airlines and airports.

(10) Strengthen financial support for core enterprises in the industrial chain and supply chain. Establish scientific and technological innovation re-loans, provide re-loan support for qualified scientific and technological innovation loans, and guide financial institutions to increase their support for enterprise technological development and technological transformation. Establish a credit and bond financing docking mechanism to guide financial institutions to quickly respond to the financing needs of core industrial chain and supporting enterprises. Standardize the development of supply chain financial business, give full play to the role of financial instruments such as supply chain bills and accounts receivable financing service platforms, and support the financing of supply chain enterprises.

(11) Increase financial support for effective investment. Developmental and policy banks should increase financial support for key investment projects based on their own business scope. Financial institutions should take the initiative to connect with major projects, and increase investment in projects that benefit people's livelihood and make up for shortcomings in areas such as water conservancy, transportation, pipe networks, and municipal infrastructure, as well as new infrastructure such as fifth-generation mobile communications (5G), industrial Internet, and data centers. With the support of construction, we will promote new construction projects to start as soon as possible and achieve physical workload. It is necessary to purchase local government bonds reasonably and support local governments in appropriately advancing infrastructure investment. It is necessary to ensure the reasonable financing needs of financing platform companies in accordance with market-oriented principles on the premise of controllable risks and compliance with laws and regulations. They must not blindly withdraw, suppress or suspend loans to ensure the smooth implementation of projects under construction. Provide financial support for private investment, government and social capital cooperation. The proportion of new loans provided by financial institutions to provinces (autonomous regions) with slow credit growth should increase steadily.

(12) Actively support the healthy development of private enterprises. Adhere to the "two unwavering principles" and treat the state-owned economy and the private economy equally in terms of financial policies such as loans and bond financing policies. Encourage financial institutions and private enterprises to establish medium- and long-term cooperative relationships, set annual service targets for private enterprises, fully meet the reasonable financial needs of the private economy, and further increase the proportion of loans to private enterprises in newly issued corporate loans.

Give full play to the leading role of the National Financing Guarantee Fund and encourage qualified localities to set up special funds for loan risk compensation or credit guarantee funds for private enterprises, focusing on providing credit enhancement services for first loans, on-lending, and renewal loans. Improve the bond financing support mechanism for private enterprises and encourage financial institutions to increase investment in private enterprise bonds.

(13) Improve financial services in the housing field. It is necessary to adhere to the positioning of "houses are for living in, not for speculation", focus on the goal of "stabilizing land prices, stabilizing housing prices, and stabilizing expectations", implement differentiated housing credit policies according to city policies, and reasonably determine commercial individual housing within the jurisdiction The minimum down payment ratio and minimum loan interest rate requirements for loans can better meet the reasonable housing needs of home buyers and promote the stable and healthy development of the local real estate market.

Financial institutions should distinguish between project risks and enterprise group risks, increase support for high-quality projects, not blindly withdraw loans, cut off loans, or suppress loans, do not engage in "one size fits all", and maintain stable and stable real estate development loans. Order delivery. Commercial banks, financial asset management companies, etc. must provide M&A financial services for key real estate enterprise risk disposal projects, carry out M&A loan business in a steady and orderly manner, increase M&A bond financing support, and actively provide M&A financial advisory services.

Financial institutions should moderately increase liquidity loan and other support on the basis of controllable risks to meet the reasonable financing needs of construction companies, and should not blindly withdraw, cut off or suppress loans, and maintain the continuity of financing for construction companies. Stablize.

(14) Guide platform companies to carry out inclusive financial services in compliance with laws and regulations. On the basis of promoting the standardized and healthy development of online financial services of platform enterprises, the positive role of financial services for platform enterprises should be brought into play. Support platform companies to use Internet technology to optimize scenario-based online financing products and provide contactless financial services to platform merchants and consumers. Platform companies are encouraged to give full play to their advantages in customer acquisition, data, risk control and technology, and increase their support for first loans and credit loans in the "agriculture, rural areas and farmers" and small and micro sectors. Guide platform companies to steadily reduce interest and fee levels, provide loan customers affected by the epidemic with deferred principal and interest services, and maximize the benefits to enterprises and the people. Urge platform companies to standardize business cooperation with financial institutions, empower financial institutions to accelerate digital transformation, and improve the efficiency and coverage of financial services.

(15) Strengthen financial services for key consumption areas and new citizen groups. Establish a special re-loan for inclusive elderly care, provide re-loan support to eligible inclusive elderly care loans, and increase financial support for inclusive elderly care institutions. Guide financial institutions to standardize the development of consumer credit products and services, and increase support for areas such as medical health, elderly care and childcare, cultural tourism, new consumption, green consumption, and rural consumption in counties. Financial institutions are encouraged to enrich bulk consumer financial products such as automobiles to meet reasonable consumer fund needs.

Financial institutions must make good use of the entrepreneurial guaranteed loan policy, focus on the entrepreneurial forms, income characteristics, and capital needs of new citizens, enrich the supply of credit products, reduce the financing costs of new citizens, and stimulate the entrepreneurial and employment vitality of new citizens. Actively innovate financial products and services targeting new citizen consumption, vocational skills training, children's education, health insurance, pension security, housing and other fields to improve the equality and convenience of basic financial services.

3. Optimize the handling of foreign exchange and cross-border RMB business and promote the stable development of foreign trade exports

(16) Improve the level of trade facilitation. The policy to facilitate trade and foreign exchange receipts and payments of high-quality enterprises will be extended to the whole country, steadily carry out pilot programs to facilitate higher-level trade and investment RMB settlement, and encourage banks to include more high-quality small and medium-sized enterprises in the scope of facilitation policies. Further expand settlement channels and support qualified non-bank payment institutions and banks to provide efficient and low-cost cross-border capital settlement services for market entities related to new trade formats such as cross-border e-commerce and foreign trade comprehensive services based on electronic transaction information.

(17) Facilitate cross-border financing for enterprises. Support qualified high-tech and specialized small and medium-sized enterprises to carry out pilot projects for foreign debt facilitation quotas. Further facilitate enterprises to borrow foreign debt, and support non-financial enterprises to use one foreign debt account for multiple foreign debts. Support enterprises to apply for foreign debt registration online. Qualified non-financial enterprises in pilot areas can directly go to banks to handle foreign exchange registration services for foreign debts and other capital projects in accordance with regulations.

Domestic foreign exchange loans with a trade and export background are allowed to be used for foreign exchange settlement. In principle, enterprises should repay with funds collected from trade and export. If an enterprise is unable to collect foreign exchange on time due to special circumstances and has no foreign exchange funds to repay domestic foreign exchange loans with a trade and export background, the lending bank may handle the foreign exchange repayment procedures for the enterprise in accordance with regulations. Financial institutions should actively innovate trade finance products, improve trade finance service levels, and provide necessary financial support for enterprises’ import and export trade.

(18) Improve enterprise exchange rate risk management services. Financial institutions must promptly respond to the exchange rate hedging needs of foreign trade companies and other market entities, support companies in expanding cross-border RMB settlement, optimize foreign exchange derivatives business management and services, and reduce companies' risk hedging costs. Encourage qualified regions to strengthen government-bank-enterprise cooperation, explore and improve the exchange rate hedging cost sharing mechanism, expand the government financing guarantee system to provide enterprises with guarantees for trade financing and exchange rate hedging business, and improve the ability of enterprises to cope with exchange rate fluctuations.

The China Foreign Exchange Trading Center waives interbank foreign exchange market transaction fees related to foreign exchange derivatives transactions for small, medium and micro enterprises.

(19) Optimize cross-border business processing processes and services. To further enhance the digitalization level of cross-border business, banks can provide cross-border settlement services through online and paperless methods such as reviewing electronic documents. Banks should improve the efficiency of cross-border receipts and payments under corporate current accounts. Encourage banks to enrich RMB investment and financing products and facilitate enterprises to use RMB in foreign economic and trade activities and international cooperation.

(20) Increase export credit insurance support. Give full play to the credit-enhancing role of export credit insurance, guide insurance institutions to provide financial services to small, medium and micro foreign trade enterprises, and further improve the efficiency of insurance claims. Deepen the four-party cooperation between government, insurance, banks and enterprises, and provide richer cross-border trade background information and more convenient verification services through the cross-border financial service platform "Export Credit Insurance Policy Financing" application scenario, accurately serve foreign trade enterprises, and expand the scale of policy financing.

(21) Improve the convenience of cross-border investment and financing for investors. Promote unified access standards for inter-bank and exchange bond markets, simplify market entry procedures, and improve the management of funds for foreign investors investing in the domestic bond market. Optimize the management of funds for domestically issued bonds (Panda bonds) by overseas institutions. Domestic affiliated enterprises of the Panda bond issuers can borrow relevant Panda bond funds based on the principle of actual needs. Further facilitate qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII) to handle domestic securities and futures investment fund registration services.

4. Strengthen the party’s leadership and improve the long-term sustainability of policies and the effectiveness of policy propaganda

(22) Give full play to the leading role of party building. All units and financial institutions of the People's Bank of China and the State Administration of Foreign Exchange must improve their political stance, unify their thoughts and actions with the decisions and arrangements of the Party Central Committee and the State Council, adhere to the supremacy of people and life, and effectively coordinate epidemic prevention and control and economic development. As social development work is a major political task at present, we must strengthen organizational leadership, implement relevant policies, and go all out to provide financial services.

(23) Strengthen the sustainability of financial support. Financial institutions must adhere to the principles of marketization and rule of law, comprehensively consider factors such as profits, provisions and write-offs, independently review loans, make decisions independently, bear their own risks, and continue to provide financial support. It is necessary to prevent moral hazards, strengthen monitoring of capital flows and risk situations, and ensure that enterprises use funds in a compliant and reasonable manner. All units of the People's Bank of China and the State Administration of Foreign Exchange must resolve the pain points and difficulties in policy implementation, proactively respond to the reasonable demands of financial institutions and market entities, and improve the long-term mechanism for policy implementation. It is necessary to increase policy publicity through the media, the Internet, etc. to ensure that the policy benefits market entities in a timely manner.

People's Bank of China and State Administration of Foreign Exchange

April 18, 2022