Premier Li urges financial sector to better serve real economy

Chinese Premier Li Keqiang presides over a meeting at the China Banking and Insurance Regulatory Commission after a visit to Bank of China, Industrial and Commercial Bank of China, and China Construction Bank in Beijing, capital of China, Jan. 4, 2019. (Xinhua/Pang Xinglei)

Chinese Premier Li Keqiang Friday urged financial institutions to better serve the real economy and take effective measures to address financing barriers facing enterprises.

Keeping employment stable relies on numerous small and micro-sized enterprises, whose development requires the support of inclusive financing, a promising and beneficial cause, Li made the remarks during a visit to Bank of China, Industrial and Commercial Bank of China, and China Construction Bank.

Li encouraged state-owned banks to take the lead in offering considerate services to private and small and micro-sized enterprises, establishing inclusive financing brands, and boosting market vitality and the corporate sector's confidence.

After the visit, Li held a meeting at the China Banking and Insurance Regulatory Commission, calling for more policy support for the real economy, private firms, and small and micro-sized enterprises in particular.

Li said the government will stick to the basic tone of seeking progress while maintaining stability, maintain the consistency and stability of the macro policy and enhance counter-cyclical adjustments.

Policy support might include tax reduction, across-the-board reserve requirement ratio (RRR) cuts, and targeted RRR cuts.

The key for the financial sector to serve the real economy is to cope with the need of keeping economic growth within a reasonable range and stabilizing employment, Li said.

He said China will keep the prudent monetary policy "neither too tight nor too loose" while maintaining market liquidity at a reasonably ample level and make financing more accessible and affordable for the real economy.

Efforts will be taken to further develop direct financing while improving comprehensive regulation to forestall systemic and regional financial risks, Li added.

China's central bank announced Friday afternoon to cut the RRR by one percentage point in a move to increase loan funding sources for the real economy.