(Yicai Global) Nov. 9 -- China's top banking regulator has called on commercial lenders to free up liquidity in the private sector by ensuring that new corporate loans make up at least half of new borrowing within three years.

Specifically, new corporate loans should account for one-third of lending from larger banks, and two-thirds for small and medium-sized commercial lenders, according to a plan set out by China Banking and Insurance Regulatory Commission Chairman Guo Shuqing in an interview with Financial News, the official publication of the country's central banks.

President Xi chaired a symposium last week set to up to garner opinions and suggestions from private entrepreneurs on the current challenges that they face, and followed it up with a key speech on the matter.

Guo pointed out the speech was not only to reassure the private sector but also to calm financial institutions and regulatory departments. The CBIRC aims to resolve financing difficulties by focusing on five key aspects, namely stability, reform, expansion, movement and decline.

Stability refers to stable financing, confidence and expectations. Regulators will jointly release policy documents. As of the end of September, bank loans for private companies accounted for nearly one-quarter of total loans, and the growth is continuing.

Reform refers to the connection between financial institutions' performance appraisal with support toward private economy and optimization of mechanisms for due diligence exemption and error tolerance and correction. Loans of up to CNY10 million (USD1.4 million) for small and micro businesses increased 19.8% on year in the first three quarters.

Expansion refers to the expansion of financing channels for private companies, comprehensively utilizing direct and indirect financing channels to fully mobilize various financial resources such as credit, bonds, equity, financing, trust and insurance.

Movement refers to the ability to dispose of non-performing assets, activate credit stock, promote market-oriented and legalized debt-to-equity swaps and establish a joint credit granting mechanism.

Decline refers to the reduction in financing costs for private companies through multiple measures, as well as urging financial institutions to reduce service charges, optimize service procedures, and set differentiated target regarding lowering loan interest rates.

As of the end of the third quarter, the average lending rate for small and micro businesses among 18 major commercial banks, urban commercial banks, rural small and medium financial institutions and internet-based banks dropped by around 0.7 percentage point, 0.3 percentage point, 0.9 percentage point and 1 percentage point compared with that of the first quarter, respectively.