MNI POLICY: China Promises Lower Borrowing Costs For SMEs

     BEIJING (MNI) - The People's Bank of China will lower the reserve ratio

requirement for targeted banks further and adopt more tools to support small and

medium enterprises impacted by the coronavirus epidemic, Deputy Governor Chen

Yulu said on Monday.

     Commercial banks are being encouraged to sell more special financial bonds

to boost capital to increase lending to small firms, Chen said at a press

conference.

     Here are other takeaways:

     - Non-performing loan ratios for SMEs are "a bit" higher than the overall

1.86%, but still below the regulatory standard 5%, according to Chen. The

provision coverage is at 180%, giving China ample resources and capability to

deal with impacts from the outbreak, Chen said.

     - China can still hit growth targets in 2020 and will continue lowering

taxes and fees for SMEs and push through new investment projects, said Cong

Liang, the secretary general of the National Development and Reform Commission. 

     - The central government will step up transfer payments to local

governments to alleviate pressure on fiscal revenue and expenditure Alongside

that, local authorities will increase the sale of special-purpose bonds this

year, Ou Hanwen, the assistant minister of Finance said.

     - China will attract less foreign capital in Q1 due to the epidemic, but

the impact should be short-term, said Ren Hongbin, assistant minister of

Commerce.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MMQPB$,M$A$$$,M$Q$$$,MGQ$$$]