The two sessions proposed state-owned banks to increase loans to small and micro enterprises, the outside world is not optimistic

In comprehensive news, the National People’s Congress and the Chinese People’s Political Consultative Conference are currently being held in Beijing. Chinese Premier Li Keqiang pointed out in his government report that efforts will be made to solve the problem of difficult financing for enterprises, and asked large state-owned commercial banks to increase loans to small and medium-sized enterprises by more than 30%, while reducing financing costs for small and medium-sized enterprises.

According to the financial media “First Financial”, He Haifeng, director of the Financial Policy Research Center of the Chinese Academy of Social Sciences, believes that the government work report has never been so specific and directed to such requirements. He predicted that the annual credit growth rate will be between 13% and 14%. It is positive to increase the share of small and micro enterprises in the overall new credit allocation.

But outside views on this are not unanimous. Michael Pettis, a senior fellow at the Tsinghua-Carnegie Center for Global Policy, tweeted that instead of trying to solve the systemic problem of banks not lending to SMEs, the Chinese government is imposing a higher loan ratio, which may not be effective. Banks are likely to invent ways to circumvent the substantive requirements of such regulations.