ANNOUNCEMENT 29 Mar 2017
March 29th, 2017 - The People's Bank of China, the Ministry of Industry and Information Technology and three further departments of the Chinese government jointly announced a new policy that enrols the support of financial institutions in the implementation of the 'Made in China 2025' plan and PRC Ministry of Industry and Information Technology's 'Network and Industry Integration Five-Year Plan'. Several instruments are mentioned in the announcement, including state lending as well as 'optimisation of foreign exchange' to encourage firms to use RMB loans for foreign investment.
NUMBER OF INTERVENTIONS
People's Bank of China, PRC Ministry of Industry and Information Technology, China Banking Regulatory Commission, SFC, CIRC, March 29th, 2017. (五部门关于金融支持制造强国建设的指导意见)
The primary aim of the joint guidance released on 29 March 2017 is to strengthen the integration of manufacturing and information technology. This guidance discusses financing as a means to achieve this aim. It encourages various forms of financing (loans, equity/venture, bonds) to be channelled towards the integration of manufacturing and IT companies. The guidance also speaks of broadening the investor base for these instruments by standardising asset-backed securities, but also by allowing insurance companies to hold such instruments on their books.
Besides domestic expansion, the financial sector should also support the expansion of these manufacturers abroad either through trade finance or the provision of foreign exchange.
Finally, the issuing government bodies promise to consider issuing a "white list" of special firms to benefit from otherwise unspecified, special credit conditions, to consider accepting manufacturer loans as collateral in monetary policy operations, as well as to consider setting up special public funds to invest in these companies or otherwise transfer risk to the public sector.
In sum, the guidance attempts to clarify the role of financial institutions in carrying out the 'Made in China 2025' and PRC Ministry of Industry and Information Technology's 'Network and Industry Integration Five-Year Plan' (see related entries).