Lin Jianhua, president of the Wuhan branch of the central bank: Finance boosts hubei's economy to stabilize and go far

Editor's Note

Editor's note: Since the outbreak of the new crown pneumonia epidemic in 2020, China's economy has been greatly impacted. In the face of the complex and severe economic and financial situation, the People's Bank of China conscientiously implements the decision-making and deployment of the Party Central Committee and the State Council, takes the initiative, actively acts, abides by the principles and innovations, solidly performs the duties of the central bank, implements a prudent monetary policy, and effectively prevents and resolves major financial risks. The branches of the People's Bank of China focus on stabilizing enterprises and maintaining employment, combined with the characteristics of the regional economy, face difficulties, and accurately implement policies to create favorable financial conditions for the economic development of the jurisdiction. This topic specially invites the heads of some branches of the People's Bank of China to review and summarize the experience and results of the financial system in the jurisdiction over the past year or so in helping the real economy get out of difficulties and achieve high-quality development.

Hubei is the province most affected by the COVID-19 pandemic in 2020. For more than a year, the Wuhan Branch of the People's Bank of China has guided financial institutions to fully implement the package of financial policies supported by the central government in Hubei and actively supported the prevention and control of the epidemic and the recovery and development of the economy. Boosted by financial forces, in 2020, Hubei Province's GDP recovered to 95.6% of the previous year; in the first half of 2021, the province's GDP increased by 28.5% over the same period last year, fixed asset investment (excluding rural households) increased by 83.6% year-on-year, total retail sales of social consumer goods increased by 34.5%, and total import and export increased by 46.9%. Hubei Province's economy from "pressing the pause" to "restarting the recovery" to "accelerating the full recovery", the main economic indicators are improving month by month, starting a new round of acceleration, and striving to write a new chapter of high-quality development.

Support the "obstruction war" to ensure that the capital artery is unimpeded during the special period

At the beginning of 2020, after the outbreak of the epidemic prevention and control war, the Wuhan branch of the People's Bank of China guided the banking financial institutions in Hubei Province to make good use of the 300 billion yuan of special reloans for epidemic prevention and control and the 500 billion yuan and 1 trillion yuan of refinancing and rediscount quotas launched by the People's Bank of China, racing against time to send policy funds to aid epidemic prevention and control enterprises and support the fight to win the epidemic prevention and control battle.

In order to ensure the unimpeded flow of capital arteries in the special period, the Wuhan Branch of the People's Bank of China has issued a number of documents on financial support for epidemic prevention and control, guiding financial institutions under the jurisdiction of Hubei to improve the efficiency of credit approval, opening up a "green channel" for loan approval, and supporting key guarantee enterprises in epidemic prevention and control. The Hubei Branch of the China Development Bank completed the credit approval on the Chinese New Year's Eve of 2020 and issued an emergency loan of 2 billion yuan to support Wuhan to do a good job in epidemic prevention and control. The Hubei Branch of the Industrial and Commercial Bank of China has opened a green channel for examination and approval of loan needs related to epidemic prevention and anti-epidemic, allocated a special scale of funds, and guaranteed the normal capital needs of small and micro enterprises against the epidemic. The Hubei Branch of the Agricultural Bank of China took the initiative to improve credit service methods, enhance credit support, accelerate the transformation of online credit services, and actively strive for differentiated credit policies. The Hubei Branch of postal savings bank has increased its credit support for relevant medical institutions and medical device manufacturers, reasonably reduced access conditions, and arranged special credit lines to ensure the capital needs of relevant customers to maintain operation and basic production during the fight against the epidemic.

According to statistics, in 2020, the Wuhan Branch of the People's Bank of China guided banking institutions in Hubei Province to use refinancing and rediscount funds to issue a total of 133.63 billion yuan of preferential interest rate loans, supporting 141,800 enterprises. Among them, the use of special refinancing for epidemic prevention and control issued a preferential interest rate loan of 47 billion yuan, which strongly supported the anti-epidemic supply fund needs of key enterprises in the production, transportation and sales of medical supplies and daily necessities in Hubei during the critical period of epidemic prevention and control.

"Financial special trip" to accurately help small and micro enterprises to resume work and production

Under the strong leadership of the Party Central Committee, the national epidemic prevention and control campaign has achieved major strategic results, Hubei, which has been pressed the pause button, has begun to restart, enterprises seriously affected by the epidemic have also begun to resume development, and supporting enterprises to resume work and production has become the key work of Hubei financial institutions.

The epidemic has had the greatest impact on small and micro enterprises. In order to actively help private and small and micro enterprises get out of the predicament as soon as possible, on March 16, 2020, the Wuhan Branch of the People's Bank of China launched the "2020 Hubei Financial Special Trip" through the WeChat platform, and decided to carry out four special actions in Hubei Province: "President Docking", "First Loan Cultivation", "Host Bank" and "Policy Publicity", calling on the financial sector to work with enterprises to tide over the difficulties and strive to achieve the effective docking of financial resources with the financial needs of private and small and micro enterprises.

According to the action plan, the president of the three-level bank in the provinces, cities and counties under the jurisdiction of Hubei is the first responsible person for the implementation of financial policies in the special period, requiring a president to dock at least 10 enterprises, led by the president, take the initiative to understand the financial service needs of enterprises, formulate a "one enterprise, one policy" service plan, and solve the problems reflected by enterprises within a limited time. Branches at all levels under the jurisdiction of the People's Bank of China in Hubei coordinate the development and reform, economic and information, agriculture, science and technology, commerce and other competent departments to recommend the financing needs of enterprises to resume work and production, classify and sort out and push it to financial institutions, and clarify the host bank, and at the same time give the host bank special line support for re-loans. In the more than two months after the launch of the "Financial Special Trip", a total of 2,096 presidents of the financial sector in Hubei Province went deep into more than 30,000 enterprises to dock and carried out 3,158 publicity activities, covering 82,000 enterprises.

In June 2020, the People's Bank of China created two monetary policy tools that go directly to the real economy, focusing on alleviating the financial shortage of small and micro enterprises. The Wuhan Branch of the People's Bank of China has made good use of the "Financial Special Trip" activity platform to quickly and accurately promote the implementation of policy tools, continue to carry out policy publicity and guidance through multiple channels, and strive to expand the coverage of policy tools. As of the end of June 2021, the People's Bank of China's two direct monetary policy tools supported Hubei local corporate banks to extend the principal of loans of 43.094 billion yuan and issue credit loans of 15.716 billion yuan, benefiting 131,000 enterprises.

"Stabilize and guarantee millions", boost the implementation of a package of policies

At the end of April 2020, the Party Central Committee studied and determined a package of policies to support the economic and social development of Hubei Province. In view of the relevant financial policies, the Wuhan Branch of the People's Bank of China took the lead in formulating a work plan, listing 17 work tasks and 39 specific implementation measures, realizing project concretization, policy itemization, and work list, and promoting the province to carry out the special action of "financial stability and 100 million" (the provincial level focuses on more than 100 leading enterprises, more than 1,000 core enterprises and tens of thousands of small and micro enterprises with strong employability to carry out financial support and assistance to enterprises, stable posts, and expand employment. Synchronous implementation at the county level). From July to September 2020, the Wuhan Branch of the People's Bank of China, together with hubei provincial development and reform, economy and information, agriculture, commerce, culture and tourism, federation of industry and commerce and other departments, has successively decomposed the list of 1334 key enterprises to the branches of the People's Bank of China in Hubei and pushed it to the provincial branches of banks under its jurisdiction, and guided the financing docking work at different levels. Establish WeChat groups for the work of the People's Bank of China, financial institutions, and key enterprises, and enter the group with "number one" in each line, strengthen daily work exchanges, and supervise the progress of work in real time. Clarify the list of responsibilities of 17 provincial-level departments, grasp the implementation of work tasks, improve supporting work mechanisms such as information sharing, financing guarantees, and risk sharing, and promote the solution of financing blockages for key enterprises. Wuhan Branch also cooperated with the Provincial Department of Culture and Tourism and other five departments to introduce 19 measures to support the prosperity and development of small and medium-sized cultural tourism enterprises, and strengthen targeted financial services for cultural tourism and other industries that have been greatly affected by the epidemic.

After hard work, the central government's support for Hubei's package of financial policies has achieved positive results, and the operation and financing situation of market entities in Hubei Province have been significantly improved. In 2020, the province added 763 billion yuan of new loans, and the annual loan increase reached a record high, exceeding 142.3 billion yuan in the previous year; the loan balance increased by 14.6% year-on-year, an increase of 0.55 percentage points over the same period of the previous year. In December 2020, the weighted average interest rate of enterprise loans of financial institutions in the province decreased by 0.85 percentage points compared with the beginning of 2020, of which the weighted average interest rate of inclusive small and micro enterprise loans fell by 1.14 percentage points compared with the beginning of 2020. Through FTP point reduction, fee reduction, and the implementation of deferred principal and interest payments, Hubei financial institutions have accumulated more than 40 billion yuan in profits to the real economy in 2020. In the first half of 2021, Hubei's credit delivery continued the good trend of steady growth, providing strong financial support for Hubei's recovery and development. At the end of June, the balance of loans in local and foreign currencies in the province was 6.34 trillion yuan, an increase of 12.3% year-on-year according to comparable calibers; of which the balance of loans in the province's cultural and tourism industries increased by 19.66% year-on-year, 7.03 percentage points higher than the growth rate of RMB loans.

Make good use of "Internet +" to enhance the convenience of financial services

Entering the period of economic revitalization, some small and micro enterprises are difficult to enjoy the dividends of financial support policies due to information asymmetry and lack of mortgage guarantees. The Wuhan Branch of the People's Bank of China pays attention to tapping the power of financial technology, making good use of the Internet and big data technology, developing "online, data- and automated, and real-time" financial services, improving the convenience of financial services, and making small and micro enterprises faster, lower thresholds, and simpler procedures.

On the one hand, the Wuhan Branch of the People's Bank of China vigorously promotes the application of the Accounts Receivable Financing Service Platform (hereinafter referred to as the "Zhongzheng Platform") to promote the financing of accounts receivable of small and micro enterprises. Organize the branches of the People's Bank of China in Hubei to work with relevant departments to determine the list of key core enterprises and units, and promote the docking of the enterprises in the list with the zhongzheng platform system. Guide financial institutions to improve the system, increase the application of the Zhongzheng platform, and provide better online accounts receivable financing services. In order to meet the credit financing needs of the winning enterprises in government procurement, the Wuhan Branch of the People's Bank of China will also work with the Department of Finance of Hubei Province to develop a provincial-level "government procurement and loan" platform to provide small and micro enterprises with one-stop financing services from user registration, financing application, payment collection agreement to loan issuance (interest rate is more than 20% lower, the fastest 1 working day lending, zero mortgage, zero errands). In 2020, Hubei Province relied on the Zhongzheng platform to achieve 5,327 accounts receivable financing with an amount of 365.3 billion yuan, an increase of 13.4% and 13.8% respectively, and the financing of accounts receivable was at the forefront of the country. In the first half of 2021, Hubei Province relied on the Zhongzheng platform to achieve 1,520 financings with an amount of 58.7 billion yuan, an increase of 67% and 4.6% respectively year-on-year.

On the other hand, the Wuhan Branch of the People's Bank of China has actively promoted the construction of a credit information platform and smoothed the information obstruction of the issuance of inclusive small and micro credit loans. In the name of the Hubei Provincial Leading Group for Financial Ecological Construction, the Notice on Accelerating the Opening and Sharing of Enterprise-related Government Affairs Information to Banks was issued to promote the exchange of information between local administrative departments and banks. Together with the Hubei Provincial Local Financial Supervision and Administration Bureau and the Provincial Government Affairs Management Office, we have launched the construction of a provincial-level financing credit platform for small and medium-sized enterprises, and actively promoted cities and prefectures to accelerate the construction of a credit information platform for small and medium-sized enterprises, and have now promoted the construction of local small and medium-sized enterprise credit information platforms in 11 places, including Wuhan, Yichang, and Jingmen. Among them, the enterprise financing docking service platform (hereinafter referred to as "Hanrongtong") built by Wuhan City has three major functions of "financing docking, credit evaluation, and enterprise sustainable operation assessment", and realizes the integrated comprehensive service of "credit information + financing". Relying on the municipal affairs service network and the "citizen e-home" APP, Yichang City has built an "online financial service hall", integrating Yichang smart city big data and Internet government affairs advantage resources, using government data to increase credit for enterprise "portraits", and smoothing the docking channels for banks and enterprises with the mode of "full online" or "online + offline". By the end of June 2021, the province's local credit information platforms had settled in 254 institutions, released 1,089 financial products, and cumulatively supported banks and enterprises to raise nearly 200 billion yuan.

In addition, the Wuhan Branch of the People's Bank of China, the Hubei Branch of the Foreign Exchange Bureau, the Department of Commerce of Hubei Province (Provincial Port Office), Wuhan Customs and other units have jointly built a cross-border e-commerce data sharing platform. Relying on the Wuhan Financial Information Service Platform, the platform obtains customs cross-border e-commerce list data through docking the "single window" platform for international trade, and provides banks with automatic verification services for cross-border e-commerce lists. Enterprises only need to provide the customs list number, the bank can achieve batch automatic verification through the platform, the business processing takes less than half an hour, effectively solves the problem of lack of authoritative basis for the receipt and payment of foreign exchange review and low manual review efficiency, and brings dividends to cross-border e-commerce enterprises to improve capital turnover efficiency and operational efficiency.

Start a new journey and boost the high-quality development of Hubei

2021 is the opening year of the "14th Five-Year Plan" and a key stage for Hubei's economic recovery and revitalization. The Wuhan Branch of the People's Bank of China has made further efforts on key and difficult issues such as financing small and micro enterprises and county economic development, while vigorously promoting green finance and technological financial innovation, focusing on improving financial functions and boosting the high-quality development of Hubei.

Strengthen financial services for small and micro enterprises

In view of the characteristics of "urgent, frequent and difficult" financing for small and micro enterprises, the Wuhan Branch of the People's Bank of China has strengthened the financial services of small and micro enterprises from three aspects: mechanism docking, service docking and demand docking.

First, in the banking institutions of the province, the financial service mechanism of "four lists" of loan authorization, credit granting, acceptance of complaints and due diligence exemption for small and micro enterprises has been implemented, and a good atmosphere of "dare to lend, willing to lend, will lend, and be able to lend" has been cultivated to improve the convenience of financing. Publicize the bank's small and micro enterprise loan authorization and credit granting list to the public, so that small and micro enterprises can fully understand the bank's credit products and credit conditions; timely feedback the progress of loan processing to small and micro enterprises through the acceptance of the report list; and mobilize the enthusiasm of front-line business personnel through the bank's internal publicity of the due diligence exemption list. At present, 23 major banking institutions at the provincial level and 327 banks and outlets in 17 cities and prefectures have completed the list of publicity.

The second is to pilot the establishment of a first loan center for small and micro enterprises, carry out special actions, and expand the coverage of the first loan of small and micro enterprises. Select Wuhan, Yichang, Xianning and other areas in the province with relatively mature conditions to carry out the first batch of pilots, rely on the first loan center to achieve the collection, sharing and development and utilization of enterprise-related government information, build an "online + offline" one-stop first loan financing service platform, support the settled financial institutions to carry out online credit portrait service loan decisions, and improve the availability of credit for first-time borrowers. Promote banks to innovate big data credit products, quickly apply for unsecured and collateral-free credit for "zero credit" small and micro enterprises, and form a "1300" big data credit financing model (1 minute application, 3 minutes review, zero mortgage, zero errands). On April 28, 2021, Yichang Enterprise First Loan Service Center, the first enterprise first loan service center in Hubei Province, was officially inaugurated at Yichang Citizen Home, and 2 entrepreneurial loan applications were accepted on the spot on the day of unveiling. From January to June 2021, the number of new inclusive small and micro loan households in the province was 106,000, and the number of first-time loan households was 57,000, accounting for 54%. In June 2021, the Wuhan Branch of the People's Bank of China also jointly issued the "Special Action Plan for the Expansion of the First Loan of Small and Micro Enterprises and Individual Industrial and Commercial Households in Hubei Province" in conjunction with the Hubei Provincial Market Supervision and Administration Bureau, striving to achieve "two increases" in the amount and number of households of individual industrial and commercial households of small and micro enterprises within three years, the proportion of credit loans has increased, and the financing convenience and sense of gain have been continuously improved.

The third is to implement the credit cultivation project for small and micro enterprises. In May 2021, the Hubei Provincial Financial Leading Group issued the "Hubei Provincial Plan for Alleviating the Financing Difficulties of Small and Medium-sized Enterprises and Financing Your Credit Cultivation Project", establishing a unified credit cultivation project service platform at the provincial level, led by the Wuhan Branch of the People's Bank of China and the Local Financial Supervision Bureau of Hubei Province, and establishing a joint consultation mechanism with relevant departments, in addition to the normal bank-enterprise docking financing, taking the form of departmental recommendation, joint consultation, joint verification, classified handling, bank hosting, one enterprise and one policy, and common public relations, with the county as the unit, the recommendation has potential Small and medium-sized micro and medium-sized enterprises that have a market, and are in line with relevant policies and are not included in the list of untrustworthy enterprises, strive to help 1,000 enterprises solve financing problems on a rolling basis per batch. Up to now, according to the provincial credit cultivation project service platform, 938 enterprises have been recommended, 97 enterprises have been completed, and the financing amount has been 679 million yuan. It also cooperates with relevant departments to develop the "Chutian Loan Code", which is marked by a two-dimensional code, which can realize a number of functions such as enterprise scanning code to submit financing applications, accurately pushing information to the intended bank, and bank acceptance and feedback handling, effectively improving the convenience of financing.

Optimize the financing environment at the county level

Hubei has coordinated development across the whole region, and the gap is in the county, the potential is in the county, and the key is in the county. In order to support the high-quality development of Hubei County and serve the revitalization of rural areas, in April 2021, the Wuhan Branch of the People's Bank of China issued the "Several Measures on Financial Support for the High-quality Development of the County Economy", proposing 13 specific measures from the aspects of strengthening the use of policy tools, strengthening financing support in key areas, and improving the level of financial services at the county level, so as to guide more financial resources to invest in the county. Among them, in terms of the use of monetary policy tools and financial market policies, it is clear that 22 billion yuan of refinancing and rediscounting special quotas will be arranged for county financial institutions every year, the differentiated deposit reserve ratio policy will be implemented, the policy of deferring principal repayment and interest payment of loans for inclusive small and micro enterprises will continue to be implemented and the credit loan support policy will be implemented, and local legal person financial institutions will be supported to issue capital supplementary bonds, small and micro and rural financial bonds.

Promote green finance and technology financial innovation

Green development is an important direction for China's economic transformation, and scientific and technological self-reliance is the core strategy to drive national innovation and development. In recent years, the Wuhan Branch of the People's Bank of China has actively promoted the construction of the Wuhan City Circle Science and Technology Financial Reform and Innovation Pilot Zone, and at the same time joined hands with relevant departments to vigorously promote green financial innovation, and Hubei's carbon finance development is leading the country. On the basis of the work of previous years, the Wuhan Branch of the People's Bank of China took the lead in formulating and issuing the implementation opinions on the innovative development of green finance in Hubei, and carried out special assessments of cities and states as required; cooperated with the final assessment of the pilot projects of science and technology financial reform and innovation in the Wuhan city circle, and conscientiously summarized the good experience and practices of science and technology financial reform and innovation in the Wuhan city circle, and promoted them in the province. Comprehensively use monetary policy tools, window guidance, performance evaluation and other methods to guide more financial resources to invest in green development and high-tech manufacturing. As of the end of May 2021, the loan acquisition rate of science and technology SMEs in the province was 50%, covering 8.2 percentage points higher than that of the whole country; as of the end of June, the province's green loans increased by 77 billion yuan compared with the beginning of the year, an increase of 33.5% year-on-year, higher than the growth rate of various loans in the same period by 21.2 percentage points.

In the next stage, the Wuhan Branch of the People's Bank of China will continue to work with the financial sector of the province to focus on improving financial functions, with the implementation of the new development concept as the main line, the implementation of prudent monetary policy, the acceleration of the development of green finance and science and technology finance, and the guidance of more funds to invest in county and rural revitalization; with the goal of enhancing the sense of market players and the people, establish and improve the service mechanism, and continuously improve the quality and efficiency of financial services; to keep the bottom line of no systemic risks as the bottom line, and consolidate the foundation for financial risk prevention and control. Continue to improve the level of financial security protection, and contribute greater financial strength to the high-quality development of Hubei's economy.

Author| Lin Jianhua 'President of Wuhan Branch of Chinese Min bank'

Article | China Finance, No. 16, 2021

This article originated from China Financial Magazine