|
China's banking watchdog has required domestic banks to restructure their businesses to take advantage of the niche market of small non-public companies, a new growth point in China's economy strained by capital shortage.
Calling the market of bank loans toward small companies "vast and promising", Shi Jiliang, vice president of the China Banking Regulatory Commission said in Beijing Sunday that the commission would soon issue specific guidelines to help domestic banks make better use of these new opportunities.
After years of opening-up and economic reform, China's non-public economy, most companies of which are small and privately owned, has contributed more than one-third of the country's total gross domestic product and created more than 70 percent of the job opportunities in cities and towns, as official statistics reveal.
A common problem restricting their growth potential is capital shortfall as they face more difficulty than large and State-owned companies getting bank credits.
Giving no timetable for the release of the guideline, Shi said commercial banks should provide loans on a voluntary basis and following the rules of the market.
Banks are allowed to design their own products and set their own prices. A sound interior governance mechanism must be established to better control market risks, he said.
Given that Chinese laws require lending rates should not be three times higher than the benchmark interest rate set by the central bank, analysts said that commercial banks may have to walk a tight rope so as not to break the ceiling.
(Xinhua News Agency May 16, 2005)
|
