China’s central bank, the People’s Bank of China (PBOC), announced on Sunday the establishment of a special relending facility worth 500 billion yuan (approximately $70.47 billion) to stimulate scientific and technological innovation. This move aims to accelerate the nation’s advancement in key technological sectors and bolster the digital transformation of industries.
The one-year facility carries an interest rate of 1.75 percent and offers the flexibility to be extended twice, each time for an additional one-year term, according to the PBOC’s official statement.
The relending program is designed to guide financial institutions to enhance credit support for small and medium-sized enterprises (SMEs) focused on science and technology, particularly those in their early or growth stages. It also targets projects dedicated to technical transformation and equipment renewal, encouraging key sectors to become more digitalized, intelligent, advanced, and environmentally friendly.
Under this initiative, the PBOC will provide low-cost funds to 21 financial institutions, including the China Development Bank, Postal Savings Bank of China, various policy banks, state-owned commercial banks, and joint-stock commercial banks. For eligible loans issued by these institutions, the central bank will offer relending funds equivalent to 60 percent of the loan principal.
This strategic move reflects China’s commitment to fostering innovation-driven growth and supporting enterprises that contribute to technological advancement. By lowering financing costs for these firms, the PBOC aims to stimulate investment in research and development, promote industrial upgrades, and enhance the competitiveness of Chinese industries on a global scale.
The relending facility is expected to play a significant role in driving the modernization of China’s economy, aligning with the country’s broader goals of sustainable development and technological self-reliance.
Reference(s):
China's central bank unveils relending program for sci-tech innovation
cgtn.com
