China will continue with its stimulus initiatives, trying next to encourage more private investment for smaller firms, after massive government-led infrastructure spending stoked a strong economic rebound in the first half of the year.
"More effort will be made to improve the credit structure and banking supervising system because small and medium enterprises (SMEs) still face great financial difficulties," Zhang Ping, director of the National Development and Reform Commission, told the Standing Committee of the National People's Congress yesterday.
In one of its recent reports, the top legislature also suggested special policy banks be set up for SMEs.
The government's 4-trillion-yuan stimulus package has significantly boosted infrastructure construction. However, a relative lack of private investment has now given rise to domestic worries about structural imbalances in the economy.
Bao Yujun, chairman of the Research Association on the Private Economy, told China Daily: "It's a long-time problem that the SMEs can't get loans, but the economic downturn has aggravated their financial plight."
The Banking Regulatory Commission's statistics shows SMEs had borrowed 13.7 trillion yuan by the end of June, representing an increase of 31.3 percent year-on-year.
But Bao said only a fraction of that money was lent to small firms.
"Some relatively bigger medium-sized enterprises have taken a lion's share of those loans," Bao said.
Hong Qiang, an owner of a paper products processing plant in Dongguan, Guangdong province, told China Daily his factory had received more orders since June, but a lack of financing troubled him and he had been unable to get a loan from a large State bank.