SCIO press conference on China's financial statistics in H1 2022
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E-mail China.org.cn, July 21, 2022
China News Service:
How are the policy-backed and developmental financial instruments faring? How many funds are expected to be leveraged? What's the next plan? Thanks.
Zou Lan:
Thanks for your questions. Policy-backed and developmental financial instruments are temporary steps to replenish project capital and help stabilize the macro economy. With the concerted efforts of various central departments, local governments, and enterprises, some projects have been incorporated into China's key project pool or are undergoing inclusion. Some projects are improving the provision of land, energy, and other factors of production. Some projects are accelerating their preliminary work, such as investment consultation and feasibility research. All these have provided favorable conditions for financial instrument investment. The CDB and the ADBC have been actively engaged in a batch of mature projects. They will speed up investment according to laws and regulations, thus delivering solid results in capital investment and infrastructure construction.
The timely availability of capital funds is a prerequisite for starting a project. As we have learned, several projects have secured the sources of capital funds. Still, they fall short of the requirement of project capital accounting for 20% of the total investment in the infrastructure sector. The insufficiency or untimely availability of capital funds has hindered the construction of some projects. Financial instruments can be tapped in a short time to meet the project capital demands and start a project as soon as possible. As the proportion of financial instruments that can be used as project capital cannot exceed 50%, the share of financial instruments in each project is estimated to be no more than 10%. Once capital is available in full, the initial policy-backed and developmental medium to long-term credit quota of 800 billion yuan will be dispensed promptly, and non-governmental capital such as commercial bank loans will be leveraged. As a result, efforts will be pooled to deliver solid results in project implementation and stabilize the macroeconomy.
The steady operation of policy-backed and developmental financial instruments needs to be underpinned by a raft of supporting policies on the project, capital, and regulation. The PBC will, per the decisions and arrangements of the CPC Central Committee and the State Council, work together with relevant departments to implement those instruments in an orderly manner. There are mainly three aspects of work.
First, we will accelerate the creation and operation of financial instruments. Supported by various departments, the CDB and the ADBC create financial instruments according to procedures. At the same time, we will formulate regulations and strengthen business process management and risk prevention and control to deliver daily operations, post-investment management, and risk control.
Second, we will establish a list of candidate projects. The NDRC is working with various departments, enterprises managed by the central government, and local governments to sort out a list of sufficient candidates who not only have the potential to yield significant social benefits but also are economically viable. In the meantime, we will see faster work, including project approval, preparatory work before launching a project, and putting in place essential factors of production to create more favorable conditions for the two policy banks to accelerate investment.
Third, we will step up project participation. The two banks will strengthen engagement with candidate projects. For investable projects, we will make independent investment decisions in accordance with laws and regulations and market rules. We will see that capital availability is timely and project demands are duly met. As for those projects that are only investable after some policy coordination, the two banks will provide proper feedback and follow through to see that those projects receive investment as soon as possible after certain requirements are met. Thank you.
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