China Wants Its Stock, Bond Markets to Step Up Funding Role
- Senior officials call for more direct financing for businesses
- Banks are lending at thin margins to support smaller firms
People walk outside a shopping mall in Beijing.
Photographer: Greg Baker/AFP via Getty Images
This article is for subscribers only.
China’s policy makers, faced with a slowing economy and growing pressure on the banking system, have decided it’s time for the nation’s stock and bond markets to play a bigger role in funding companies.
Less than one-quarter of China’s $2.9 trillion of financing last year was from bond and equity issuance, central bank data compiled by Bloomberg show. That’s not good enough, according to senior officials, who are looking for ways to improve businesses’ access to cash without adding too much risk to the financial system.