Textile And Clothing Industry Needs New Government Policies

The supply of funds is heavy and financing channels are diverse. A series of policies promulgated by the central government have brought warmth to SMEs.

Frequent central financial policies

The central economic work conference has just concluded the key tasks of next year's economic work, including maintaining the basic stability of the RMB exchange rate at a reasonable and balanced level, and promoting the reasonable growth of the total amount of money and credit supply.

A series of policies have been published.

The implementation of these policies will be a strong support for the above goals.

In November 5th, the Executive Council of the State Council studied and deployed measures to further expand domestic demand and promote steady and rapid economic growth. It proposed that financial support should be increased, the scale of credit restrictions on commercial banks should be abolished, the credit scale should be expanded reasonably, and credit support for key projects, agriculture, rural areas, farmers, small and medium enterprises, and technological pformation, merger and reorganization should be increased. It was decided that the central government could invest 100 billion yuan in the fourth quarter of this year, and 20 billion yuan would be set up ahead of schedule for the reconstruction fund next year, which would lead to local and social investment, with a total scale of 40000 billion yuan.

In November 10th, the State Council convened a meeting of the provincial and municipal people's governments and the heads of the State Council departments.

In response to the adverse impact of the international financial crisis on China's economy, the conference decided to implement a proactive fiscal policy and moderately loose monetary policy.

The meeting proposed that we should improve financial regulation and control, and comprehensively use various policy tools to maintain reasonable growth in money and credit.

Banks, securities and insurance industries should increase their support for the real economy and effectively meet the needs of the real economy for financial services.

In November 26th, the people's Bank of China announced that it would once again reduce the benchmark interest rates for RMB loans and deposits of the financial institutions by 1.08 percentage points each year. Since December 5, 2008, the RMB deposit reserve ratio of the large deposit financial institutions such as ICBC, agricultural bank, Bank of China, China Construction Bank, Bank of communications, postal savings bank and so on will be reduced by 1 percentage points, and the RMB deposit reserve ratio of small and medium-sized deposit financial institutions will be reduced by 2 percentage points.

This is to implement the moderately loose monetary policy, ensure the full supply of banking system liquidity, promote stable growth of monetary and credit, and play a positive role of monetary policy in supporting economic growth.

On December 3rd, the Executive Council of the State Council pointed out that we should further increase financial support for economic development.

The meeting put forward the establishment of a multi-level loan guarantee fund and guarantee institutions for small and medium enterprises, increasing the proportion of loans to SMEs, appropriately increasing the proportion of foreign exchange receipts, so as to facilitate the financing of enterprises, especially SMEs, improve the efficiency of the use of foreign exchange funds, and support the development of foreign trade.

It is decided that the additional policy banks will have a loan scale of 100 billion yuan in 2008.

The loose fiscal and monetary policy is to create a relaxed financial environment and relieve pressure. It has been more than half a year after the financing problem has been lifted for more than half a year.

Before and after a series of central policies, local governments are doing everything possible to create financing conditions for SMEs.

In Dongguan city of Guangdong Province, the city finances 1 billion yuan in a lump sum to help small and medium-sized enterprises and processing trade enterprises facing difficulties.

Financing channels can choose banks, funds, Guarantee corporation or bonds, and can give money to enterprises through interest discount, or subsidize banks or Guarantee Corporation by making up for the risk loss.

Experts predict that the amplification effect of the 1 billion yuan can reach 100 billion yuan.

Shandong Yuncheng County, county Party committee and county government coordinate various financial departments to increase the credit scale of textile enterprises. Through property mortgage, joint household insurance and Guarantee Corporation guarantee, the financial sector and enterprises are truly led to form a joint relationship between fish and water.

In order to strengthen Guarantee Corporation's guarantee capability, the county finance has injected 20 million yuan into the Guarantee Corporation of the small and medium-sized enterprises, so that Guarantee Corporation has the conditions to cooperate with state-owned banks and expand the scale of secured loans.

In December 8th, the signing ceremony of the Guarantee Corporation unveiling and cum cooperation project held in Haimen, Jiangsu, was held in the international home textile city of Sanshi bridge, Sanxing Town, Haimen City, Zhejiang Province. This Guarantee Corporation is the first financial guarantee enterprise initiated by the private sector and serves the members of home textile small and medium-sized enterprises. It is of great significance for improving the credit guarantee system and promoting the sustained, rapid and healthy development of SMEs.

Wenzhou, Shaoxing and Yiwu, which are the earliest local governments to develop small and medium-sized manufacturing enterprises, are more effective. They have issued various policies to facilitate the financing of enterprises. The financing environment of SMEs has improved greatly in the first half of the year.

At the four four enlarged meeting of the China knitwear industry association, Chen Quansheng, a counselor of the State Council, pointed out that an effective measure to deal with the difficulties of small and medium-sized enterprises in clusters is to set up regional, joint-stock and private small banks.

For large banks, SMEs have fewer loans, more times, less pactions and higher operating costs.

Moreover, SMEs have less collateral assets and asymmetric credit information, while the CBRC requires banks to strengthen risk prevention and control, and big banks can not be trusted to lend.

The characteristics of small and medium-sized enterprises affect the lending attitude of large banks. Moreover, too many "big customers" of large banks make the cooperation between small and medium-sized enterprises and large banks less likely.

For small regional shareholding banks, SMEs will become their "big" customers. The amount and frequency of credit funds will not become a factor to increase bank costs.

At the same time, banks and enterprises are "rooted" in the same place. They are familiar with each other. Mortgage assets and credit information can be evaluated through acquaintance society, "running the monk can not run away from the temple."

Big banks are more equal and effective for big enterprises and small banks to interact with small businesses.

In many respects, village banks meet the above suggestions and assumptions about "small banks".

As early as the end of 2006, the CBRC