China Vows Firm Financial Backing to Propel High-Quality Growth

In a commitment to bolster the nation’s high-quality economic development, Li Yunze, the head of China’s National Financial Regulatory Administration (NFRA), declared on Monday substantial financial support initiatives. Established in May 2023, the NFRA’s jurisdiction spans the financial industry, excluding the securities sector. Speaking at the conclusion of the country’s annual national legislative session, Li emphasized the pivotal role of financial services in advancing growth.

He cited notable progress in efficiency and inclusivity, citing a significant 1.3 trillion yuan ($180 billion) increase in yuan-denominated loans in 2023. Notably, sectors like high-tech and environmental initiatives experienced loan growth rates surpassing 20 percent. Continuing a downward trajectory, financing costs in China have reached historic lows, with loan interest rates plummeting. Last year’s reduction in first-home mortgage rates is estimated to save homebuyers approximately 170 billion yuan annually in interest.

In pursuit of fostering high-quality economic growth, the NFRA pledged to prioritize areas such as innovation support, consumer empowerment, and assistance for small businesses. The administration is unwavering in its support for scientific and technological innovation, exploring avenues like financial asset investment companies to expand equity investment ventures, thereby amplifying support for science and technology firms.

With the aim of stimulating effective demand, the NFRA is contemplating initiatives to enhance accessibility to car ownership. This includes potential measures like reduced down payments for car loans and refining pricing structures for new energy auto insurance. Furthermore, a special initiative on inclusive finance is being launched to augment the availability and volume of small and micro loans. Li also offered reassurances regarding financial risks, stating that they are generally under control, and China possesses sufficient resources to manage any potential challenges.