China's Central Bank takes actions to empower private sector
Updated 22:11, 16-Jan-2019
CGTN's Dialogue
As the crucial contributor to China's economic development, the Chinese private sector has long complained of heavy tax burdens and the difficulty of bank lending.
Last November, Chinese President Xi Jinping reassured the private sector, calling for measures to cut taxes and social levies, provide more credit support, lower market barriers, and safeguard entrepreneurs' personal and property safety.
To provide more liquidity support for China's small and micro enterprises, the People's Bank of China will leverage a basket of policy tools including bonds, bank lending and equity.
Moreover, China's central bank announced on January 4th that it would cut the reserve requirement ration (RRR) for RMB deposits by 1 percent to offset the downward pressure of economy.
As a guest on CGTN's Dialogue, Charles Liu, the founder of Hao Capital, pointed out that both the policy and direction are good for SMEs, but in terms of execution and implementation, there is a long way to go.
“From my understanding and watching, what the Central Bank is trying to do is to experiment with new means of allowing SMEs to have better access to funding. But it takes time to change the whole system.”
 “It is a big bull elephant that is walking in one direction, or a big ship - it is very difficult to turn it.”
“I've been involved in a couple of central bank's projects using new technologies like blockchain, using great bay area supply chain financing, to try to get funding to small and medium size companies. But these are still on the experimental bases.”said Liu.
He also mentioned that whether the RRR cut goes to small and micro enterprises (SMEs) or state-owned enterprises (SOEs) will turn out to be very different stories, and that it is still difficult for the private sector to get financing from banks.
As an owner in the private sector, Vincent Mo, the board chairman of, said although there are many different voices about the policies, he believes that the central bank has taken a fast step on supporting SMEs, and it will be continuously beneficial for the private sector.
“I think it's definitely a good thing for the private sector.” Mo stressed. “One item mentioned in President Xi's speech is the funding. (He emphasized) to make sure that more micro companies can get funding at reasonable expenses rather than much higher interest rates compared to state-owned companies.”
“I believe this measure taken by central bank is going to be very helpful for private sectors in this year, and even going forward.” said Mo.
Mo also considered that the top leader's reiteration on the importance of private sector demonstrates the determination and support from the central government. 
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