What’s new: Financial institutions in Shanghai are to provide 2 trillion yuan ($276 billion) in funding to support innovative technology companies over the next three years under an initiative backed by the central bank.
The Shanghai branch of the People’s Bank of China (PBOC), along with city authorities, Monday unveiled a special loan guarantee program aiming to assist private businesses through equity, loans, bonds, insurance and other financing means.
Under the plan, qualified small and medium-sized enterprises will be granted up to 20 million yuan in credit guarantees for up to three years provided by member institutions of the Shanghai Science and Technology Finance Alliance and the city government’s financing guarantee center. Up to 100 million yuan guaranteed credit will be offered to large private enterprises.
The plan outlined specific measures aimed at improving the financial service environment for technology businesses, fostering innovation and integrating Shanghai’s development as a financial and technological hub.
The context: The special loan guarantee program was unveiled as Shanghai kicked off a month-long campaign to improve the business environment and address private sector financing needs.
It is a response to President Xi Jinping’s call to support the development of “new productive forces,” referring to a new model for economic development based on innovation in advanced sectors.
Initiated by the PBOC Shanghai, the Shanghai Science and Technology Financial Alliance was founded at the end of 2023 with more than 100 financial institutions, aiming to provide one-stop financial services for tech enterprises.
Since 2024, banks in Shanghai have stepped up loan issuances to private firms in sectors including new energy, semiconductor, logistics and biopharmaceutical. Ten banks have signed agreements with 50 private companies to extend credit lines totaling 140 billion yuan.
Contact reporter Han Wei (weihan@caixin.com)
