Four-member Forum

It was suggested that the financing difficulties of enterprises, especially micro-enterprises and businesses, and that there was room for improvement among Governments and financial institutions, should ultimately be marketed to address the supply of funds and prices.

Perhaps in the winter of 2018, middle-sized national enterprises will look beyond the developing winter.

The greatest benefit came from a rare high-level meeting. On 1 November, the Central Secretary-General of China, the President of the State took the initiative of organizing a private business colloquium, consisting of three Standing Committees of the Central Political Bureau, one Chamber and one of the leading financial institutions, which was the first time in China for six years.

Such a high level of attention can be seen as a challenge to the development of the business community. For entrepreneurship, the meeting was not comparable to a psychiatry.

In recent months, local governments, the financial system, the financial system and the judicial system have met successively and issued policies, rules and regulations to help people survive. On 9 November, at a general meeting of the State Council, the Prime Minister of the State Council, strong Lee Kick, reiterated his call for increased financial support to alleviate the financial difficulties of private-sector enterprises, especially small and micro-enterprises; decided to undertake specific actions to address the problem of arrears in payments to private-sector enterprises; and deployed effective government financing guarantees to support microenterprises and “three farming” development.

Difficulty policies have been put in place, but the key to their implementation is to know what financial institutions and enterprises have in the process of dealing with. To facilitate in-depth communication between the two sides and to find ways and means of resolving the problem, on 10 November, the New Financial Research Institute of the North (NFI), under the umbrella of the Forum of Financial Fortys of China (CF40), held the first series of exchanges on the theme “Financial support for the real economy”, which was moderated by the President of the New Financial Academy and the former Vice-President of the Chinese Board of Governors. At that meeting, financial institutions and business representatives engaged in a full dialogue and also addressed the confusion and difficulties that each faced.

Field of the first series of exchanges on financial support to the real economy

Vice-President of the New Financial Academy of the North and former Vice-President of the Chinese Board of Governors

How have this wave of entrepreneurship crisis erupted?

The civil-business crisis began this year’s bond market default. Unlike the major default targets for entrepreneurship in the “one or two remaining” industry in 2014 and 2015, this round of defaulting subjects are mostly listed by private companies, especially those that rely on equity pledge, bond distribution, and significantly expanded non-marked rolling finance.

From the cause of default, the macro-regulatory environment has been tightened and, with a series of policies, such as new regulations, the access to out-of-pocket financing has been significantly tightened, while some enterprises that have previously been blindfolded and leveraged have become more vulnerable to liquidity crises and risks have been exposed.

Unlike in the past, most bond defaults have been closely linked to capital markets, and the continued decline in Chinese stock markets since this year, combined with considerable risks, the most striking of which is the risk of some of the company’s superficial discharges.

In particular, the fall in the United States unit has caused severe fluctuations in the A market since October. On 11 October and 18 October, Unit A experienced two rounds of decline, citing a drop of 2,500 points. The loss of stocks directly resulted in the release of the equity rights of listed companies, which, according to incomplete statistics of the agencies concerned, have been flatly divided among at least 45 companies listed in Unit A since this year.

The problem reflected in the back of equity is that private enterprise financing is difficult. In fact, in support of private and micro-enterprises, since this year, the People’s Bank has implemented four targeted precipitation, with a savings reserve rate of 250 basis points, with a net release of 230,000 million yuan renminbi, and has provided 30 billion illiquid support through refinancing and re-entry. The problem is, however, that monetary policy prescription mechanisms are inadequate and that the liquidity of the release is not really channelled into the real economy.

In addition, central bank data show that out-of-pocket financing was reduced by $5 trillion in the first three quarters of this year compared to the same period last year, while the increase in loans and direct financing was only $2 trillion, a gap between which represents a huge gap in market finance.

In the context of the credit crunch created by deleveraging and strong regulation, stock markets are falling, together with the various blind expansions accumulated in previous years of entrepreneurship, with risks eventually erected in October.

Policy paths for helping people to escape

Central attention is paid to the civil-business crisis and successive policies have been put in place.

In September, the Bank held two symposia to learn about the financing of private and small enterprises. On 19 October, in an effort to stabilize the market, the Deputy Prime Minister of the State Council, Liu Daqun, the Governor of the People’s Bank of China, the President of the Board of Governors, Guoqiang, and the Chairman of the Board of Trustees, Liu D. Liu Daqun, were interviewed separately to propose solutions to the current problems facing the business. Subsequently, measures were taken from the central bank to the Board of Governors and the Board of Trustees.

From the Phnom Penh conference on 21 October to the Political Bureau meeting on 31 October, the focus was on the challenge of private enterprise development.

The meeting of the highest peculiarities was held on 1 November, and the Colloquium on Private Camps highlighted three “no change”, “any negation, suspicion or disruption of our basic economic system is incompatible with the party’s and State policy of approach and is not to be heard and not convinced!” This is a form that feeds the market, especially the private sector, with a stasy.

With regard to the issue of the financing of entrepreneurship, the Platform and Guo Jiabao spoke in media interviews on 6 and 7 November respectively. The syllabus proposes a policy mix of “three arrows”: increased credit for private enterprises, support for private-sector enterprises in sending debt, and the establishment of private-sector enterprise equity financing support instruments. In terms of increasing credit, Guoqiang proposed a “one to five” target for large-scale bank loans to private enterprises.

On 8 November, the banking unit fell due to market fears that these policy objectives would increase the size of bank bad loans. In fact, however, the market has neglected the “one or five” target. Regulators stressed on the same day that the goal of “One Five” was not a hard-copy goal and did not require that every bank be able to meet; and