Li Shundi: Monetary Policy Should Be Moderately Lenient To Support Private Enterprises.

From slow to take

We should guide private economy to pform development mode, optimize industrial structure, and promote sustained and healthy development of national economy.

Li Shundi, member of the CPPCC National Committee, executive vice chairman of the China Association of private entrepreneurs, vice chairman of the Fujian Provincial Federation of industry and commerce, chairman of the board of directors of the world min business group and Shun Sheng group, recently told reporters that the monetary tightening policy should be slowed down and the credit support for private enterprises should be strengthened.

According to Li Shundi, in order to deal with international

"But it is worth noting that, based on policy guidance and operational risk management, credit supply in 2009 focused on railways, infrastructure, commodities and other industries, while private manufacturing and export industries still faced a more severe financing situation."

Li Shundi believes that the financing needs of small and medium-sized enterprises such as capital expansion and technological pformation are still not effectively met, and the high cost of financing still puzzles the development of private economy.

Statistics show that the private economy is an important part of China's economy.

"But the national credit policy has limited support for the development of private economy."

Li Shundi said that since 2007, with the decline of the total amount of money and credit in China's banks, the gap between enterprises and enterprises has been increasing. The share of credit that SMEs will share is relatively low. On the basis of this, further compression of loans has a significant marginal impact on the financing of small and medium-sized enterprises. The lending rates of banks to SMEs generally rise to 30%-40%, and some individuals are close to 80%. At the same time, many banks also ask for pledge of enterprise deposit certificates. If secured loans, plus guarantee rates of 2 to 3 percentage points guarantee agencies, the financing cost of SMEs will be heavier.

Li Shundi believes that since the fourth quarter of 2009, in the context of rising asset price bubbles and inflation risks, the state has adopted the credit policy of "grasping the rhythm of credit to prevent abnormal fluctuations between the quarter and the month". Then, in a month's time, the central bank has raised the required reserve rate for two consecutive times, although its impact on the credit scale in 2010 is limited. However, due to the multiplier effect of the credit money supply, the reduction of the loan scale is firstly impacted by the small and medium-sized private enterprises. Under this policy, a large number of enterprises have been hard pressed to control the capital of the stock pfer, and the capital chain of enterprises has frequently been in urgent need, resulting in problems such as settlement of funds, settlement of payments, settlement of wages and so on.

"At the moment when China's economic situation is just beginning to improve and the foundation for better economic development is still not solid, especially in the situation of greater adjustment of economic structure and pformation of economic development mode, the monetary policy of private enterprises should continue to be moderately broad and inclined."

For this reason, Li Shundi suggested:

We should tighten monetary tightening policy, further increase credit support for private enterprises, actively guide private economy to pform development mode, optimize industrial structure, and better promote the sustained and healthy development of national economy.