Reuters:

Have the current problems that the real economy faces about difficult and costly financing been improved? The renminbi keeps appreciating against other major currencies except the U.S. dollar, which shows the RMB's real effective exchange rate appreciation, so how much this will affect China's exports?

Sheng Laiyun:

The problem of difficult and costly financing has been a major problem for the real economy in the past two years. The CPC Central Committee and the State Council have paid great attention to it and have issued many policies and measures to ease the problem. First, according to a survey by the National Bureau of Statistics of China on small and micro businesses, the effects of these policies have started to show their power, and the problem of difficult and costly financing has been resolved to a certain extent. The survey shows that there was an increase of 6 percent in of the number of small and micro enterprises that had their financing problem solved compared with the fourth quarter of last year. Also, many of those enterprises got loans from banks at an interest rate 7 percent with fee rated counted in, 0.3 percent points lower than the last quarter of the past year. From this perspective, the problem of obtaining affordable financing has been somewhat eased by all the efforts of everyone together.

But that's not enough. The survey also shows that the problem of difficult and costly financing is still a big problem facing enterprises. According to the enterprise survey results, difficult and costly financing was the most acute among the top three problems facing small and micro businesses. We have issued relevant policies, and relevant departments have tried their best. In the next phase, we will focus on policy implementation and the reform of systems, especially the financial system, to increase the capital supply to banks and further ease the problem.

Regarding the changes in the exchange rate of the currency, from the perspective of exports, the exchange rate should not appreciate too quickly. Maintaining a balanced and predictable exchange rate will be greatly beneficial to exports. If the exchange rate rises too quickly, it will increase export costs. But changes in the exchange rate involve so many elements, especially in the process of exchange rate marketization, so there are certain uncertainties in this aspect. I suggest that you ask the relevant administrative department for details on this issue, and they must be able to provide a more professional answer than I can. Thank you.

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