What’s new: China’s State Council, the cabinet, on Thursday signed off on a policy document calling for financial institutions to step up support for small and medium-sized enterprises (SMEs) traded on the Beijing Stock Exchange.
The initiative is part of a broader plan to revitalize financial service development in the capital city.
The State Council said it will encourage commercial banks and other financial institutions to develop credit, guarantee and supply chain financing products to specifically serve innovative SMEs, while allowing institutions to moderately relax guarantee requirements for loan financing of firms listed on the Beijing Stock Exchange.
The cabinet pledged to conduct research on the launch of exchange-traded funds (ETFs) on the Beijing bourse and promote the opening-up of the market. It supports overseas insurance companies in directly establishing insurance asset management companies in Beijing, on condition that risks are manageable, the cabinet said.
The State Council also vowed to streamline cross-border capital flows for eligible foreign investors and promised to treat overseas institutions and investors fairly in related administrative procedures.
The context: The measures outlined are part of a general plan approved by the State Council to promote the development and opening-up of service sectors in Beijing. They are also the latest efforts to bolster small businesses to shore up the economy.
The Beijing Stock Exchange (BSE), the first bourse based in the capital city, opened in late 2021 and was designed as an incubator for small businesses to tap investors directly for capital and reduce their reliance on banks for funding.
Most companies listed on the exchange migrated from the National Equities Exchange and Quotations Co. Ltd. (NEEQ), an over-the-counter marketplace for small firms that do not meet the listing standards for the Shanghai or Shenzhen stock exchanges.
Contact reporter Han Wei (weihan@caixin.com)
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