China encourages opening of more private banks

Needed to support cash-starved small firms.

The State Council, China’s cabinet, has revealed plans to establish more private banks in the latest bid to boost China’s flagging economy.

A statement said the cabinet will actively develop small-sized financial institutions and open up the channel for private capital to enter the financial sector.

The improved access to finance will be somewhat relaxed for growth- and innovation-based enterprises, while refinancing for listed small and medium enterprises or SMEs will also be on the agenda.

More trials for privately-placed bonds for SMEs will be encouraged to increase bond issuance and build a quick and flexible financing mechanism.