(Yicai) Aug. 6 -- Seven Chinese government departments have released a set of guidelines aimed at establishing a comprehensive financial support system to back the country’s push toward building a modern industrial system.

The core aim is to use financial services to better support the real economy, according to the paper compiled by the People’s Bank of China, the National Development and Reform Commission and five other government bodies, which was published on the central bank’s website yesterday.

By deepening ties between industry and finance and strengthening policy coordination, the goal is to provide high-quality financial support for China’s new industrialization drive and the development of new quality productive forces, the document said.

By 2027, China aims to have a mature financial system to support the manufacturing sector’s move toward becoming more high-end, smart and green, the guidelines said. Financial tools such as loans, bonds and equities will be more closely linked. The availability of credit, the scale of bond issuance and the level of equity financing for manufacturing companies are all expected to increase significantly.

Government support will mainly be directed toward four major areas. The first is boosting innovation in science and technology in industries. Financial resources will be steered toward tech breakthroughs in key industrial chains such as semiconductors and advanced manufacturing equipment. Initial public offering channels will be fast-tracked to help tech firms raise funds through stock markets. And social capital will be encouraged to invest early, in smaller firms and to take a long-term outlook when investing in hard and core technologies so as to help speed up the turning of scientific advances into market-ready products.

The second is supporting the construction of systems for modernized industries. The policy aims to improve financing services for upgrading traditional manufacturing and backing companies’ efforts to go digital and green. More financial support will be directed toward emerging industries such as smart connected vehicles and renewable energy, while also laying the groundwork for future industries.

At the same time, the financing of supply chains will be strengthened and tools such as accounts receivable financing and supply-chain notes will be implemented to benefit small and medium-sized suppliers.

The third is promoting balanced regional industrial development. Financial services will support the shift of industries to the country’s central, western and northeastern regions. Support will also go to strengthening financial services for building up advanced manufacturing clusters and facilitating cross-border finance to help Chinese companies expand overseas.

The fourth is enhancing financial institutions’ capabilities. Banks and other financial players will be required to improve internal mechanisms, design dedicated loan plans for manufacturing and perfect a liability exemption system for responsible conduct.

Cross-sector cooperation, among banks, insurers and securities firms, will be encouraged, along with training financial professionals with a diverse skill set. There will also be greater coordination on policies and stronger risk controls to fend off ‘involution-style’ competition, or excessive and self-defeating competition, within industries.

The guidelines aim to ensure funding and industry are better linked through tailored measures and innovation with financial tools, and that a full-cycle financial support system is in place for building China’s modern industrial framework.

Editor: Kim Taylor