Chinese Authorities To Aid Small Businesses For Economic Recovery

China's banking and insurance regulator said this year that it would increase lending support and cut the actual financing costs of small and micro companies to help the economy recover.

The China Banking and Insurance Regulatory Commission (CBIRC) said in a statement on Thursday that financial institutions should give reasonable credit to small firms while avoiding the risk of "over-lending."

According to the CBIRC, its goal is to improve the quality of financial services for small and micro businesses, increase market vitality, and boost confidence.

According to the report, financial institutions should set reasonable lending rates based on the benchmark loan prime rate and the characteristics of small and micro firms.

The CBIRC went on to say that it would improve the credit structure for small firms and meet the reasonable financing needs of small businesses with credit lines above 10 million yuan ($1.44 million).

The regulator also stated that financial institutions should not renew loans for non-business and production objectives, and that loan renewals should not be used to cover up credit problems.