.jpg)
To implement the strategic deployment of the CPC Central Commitment of both consolidating and developing the public sector and encouraging, supporting and guiding development of the non-public sector and put in place the policy requirement of improving the system for supporting bond financing by private enterprises as stated in the Report of the Work of the Government, Shenzhen Stock Exchange (SZSE) held the seminar on “Improving Credit Support for Private Enterprises” on April 29, 2022. With a focus on improving credit support, the seminar was held to discuss pragmatic measures aimed to relieve private enterprises’ difficulties in accessing financing and facilitate a consensus among market participants. Nearly 80 persons including heads of relevant departments from China Securities Regulatory Commission (CSRC), SZSE and local finance bureaus of Beijing, Jiangsu, Henan, Sichuan, Shenzhen, etc. and representatives of nine private enterprises, four securities companies and 14 financing guarantee institutions attended the seminar via video link. The attendees fully exchanged experiences, practices, measures and ideas on how to improve the credit support for private enterprises in their bond financing and gave opinions and advice on increasing bond market financing support for private enterprises.
The representatives at the seminar said that the private sector is an important part of the Chinese socialist market economy, and the capital market, as the platform that optimizes resource allocation, plays a vital role in ensuring the healthy and sustainable development of private enterprises through financing. However, affected by many factors, private enterprises are faced with some problems in bond financing. The representatives believed that with the policy support and guidance of the State Council and the joint efforts of buyers, sellers and intermediaries, if we give further play to the roles of credit support institutions such as guarantee institutions and credit enhancement institutions, it will help form demonstration and driving effect and promote the financing support for private enterprises to deliver solid outcomes.
Under the leadership of CSRC, SZSE has long been actively employing diversified capital instruments to support entity enterprises including private enterprises in expanding financing channels. Currently there are more than 1,700 private enterprises listed on SZSE, accounting for 67% of the total number of SZSE-listed companies, and SZSE has supported private enterprises in obtaining about CNY 2.6 trillion bond financing. Meanwhile, SZSE has kept promoting integrated development of innovation in bond market products with credit support, to stabilize and improve bond financing by private enterprises. First, we have launched innovative products to serve national strategies including Technological Innovation Corporate Bonds and Digital Economy Corporate Bonds, which have directly or indirectly supported private tech companies obtaining about CNY 42 billion financing. Second, we have encouraged financing guarantee institutions to provide credit enhancement for the bonds issued by private enterprises. A total of over CNY 310 billion bonds with credit enhancement measures have been issued by private enterprises. Third, we have issued over CNY 690 billion supply chain payables ABS using core enterprises’ credit, which helped tens of thousands of small and medium-sized enterprises on industrial chains address their insufficient financial credit. Fourth, we have developed credit protection instruments. We have concluded 78 contracted transactions and nine certificates projects, mobilizing about CNY 20 billion financing by private enterprises. Fifth, we have rolled out bailout bonds. A total of CNY 23.4 billion bailout bonds have been issued to support bond issuance by eligible enterprises, which has indirectly or indirectly relieved the liquidity pressure of listed companies and shareholders.
Next, SZSE will work unswervingly both to consolidate and develop the public sector and to encourage, support and guide development of the non-public sector. Regarding the feedback of market entities, we will coordinate actions with relevant parties to improve the system for supporting bond financing by private enterprises. We will intensify support to the supporting instruments for financing by private enterprises, pledge-style repo of credit protected bonds, etc., while encouraging private enterprises to issue assets credit-based securitization products such as publicly offered infrastructure REITs, quasi-REITs, intellectual property securitization. We will further diversify bond financing channels for private enterprises, launch more innovative bond products that can directly reach the private sector, and strengthen our service quality and efficiency in supporting the high-quality development of the private sector.
