Financial Institutions Urged to ‘Sacrifice’ Profit to Support Businesses
What’s New: Chinese Premier Li Keqiang Wednesday called on the country’s financial system to “sacrifice” 1.5 trillion yuan ($212 billion) of profit this year to support enterprises recovering from the pandemic and stabilize the economy.
Banks and other financial institutions could support businesses by offering lower lending rates, cutting service fees and deferring loan repayments, a State Council meeting led by Li said Wednesday according to state television.
A person close to the State Council said major supportive measures are expected to be cutting companies’ borrowing costs for existing and new loans.
Background: The call from the top leadership underscored China’s urgency to bolster the virus-hit economy. The government has issued a series of policies this year to reduce business costs and inject market liquidity.
The most recent policy was issued May 25 by several central government departments to regulate charges for financial services to reduce costs for smaller companies.
In 2019, Chinese commercial banks reported a combined 2 trillion yuan ($282 billion) of net profit, according to official data.
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