(Yicai Global) Aug. 13 -- The China Banking and Insurance Regulatory Commission will promote the development of the capital market in the second half to raise the proportion of companies’ direct financing, its Chairman Guo Shuqing said in an interview with CCTV yesterday.

The ratio of direct financing rose from 32 percent at year’s start to 36 percent in the first half, including funding in the stock and bond markets, Guo said, adding the CBIRC hopes this trend holds and capital markets provide more money directly to companies.

The People's Bank of China has studied reserve policies to support economic recovery and growth. A salient problem now is that the service sector has not fully returned to normal [post-Covid-19], Guo added.

Regulators are thus resorting to emergency financing and exploring pilot projects in some provinces, he said.

China frets about small, medium and micro enterprises and financial management agencies will better integrate their services of stabilizing firms, securing employment, and helping private smaller players greatly reduce their overall financing costs, he stated.

Financial regulators increased loans to small and micro enterprises during the first half, Guo noted. More than 23.6 million or two-thirds of the over 30 million small and micro firms nationwide may secure a bank loan, a rate among the best in the world.

Authorities will also encourage substantial increases in medium and long-term financing for advanced manufacturing and strategic emerging industries, and will better combine financial policies for employment, industry and regions to integrate their effect, Guo added.

New loans to manufacturing in the first half are equal to the sum of the past four years, he stated. Medium and long-term loans, mainly used to invest in fixed assets, jumped 13.4 percent, a rarity in recent years. Both these loans’ total amounts and structure have greatly improved, hastening macro-economic recovery.

Editor: Ben Armour