China’s top financial regulators have signaled a renewed commitment to bolstering private enterprises, underscoring their role as a driving force in innovation and economic resilience. In a high-level symposium convened on February 28 by the People's Bank of China (PBOC) alongside the National Financial Regulatory Administration, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and the All-China Federation of Industry and Commerce, policymakers outlined a series of initiatives aimed at expanding financial access for private firms.

The symposium highlighted the need for a more accommodative monetary policy and structural financial tools to improve credit access for small and medium-sized enterprises (SMEs). PBOC Governor Pan Gongsheng emphasized the central bank’s role in ensuring sufficient liquidity while keeping financing costs low over an extended period. Financial institutions were urged to adjust their risk appetites and streamline processes for private sector lending, reinforcing the message that private businesses should receive equal treatment in financial markets.

Regulators also stressed the full implementation of a 25-point plan designed to enhance financial support for private businesses. Among the key measures discussed were improvements to credit enhancement mechanisms, the development of supply chain finance regulations, and targeted support for technology-driven firms, mergers and acquisitions, and industrial upgrades.

China's bond market is set to play a larger role in addressing private firms' financing challenges. The PBOC reaffirmed its commitment to the existing Private Enterprise Bond Financing Support Tool, often referred to as the 'second arrow,' which has provided a crucial backstop for credit-starved firms. Calls for expanding long-term bond issuance were echoed by Geely Holding Group CEO Li Donghui, who suggested that financial authorities incentivize institutional investors to participate more actively in private enterprise debt markets.

Meanwhile, stock market reforms are also in focus. The China Securities Regulatory Commission (CSRC) underscored its intention to enhance capital market access for private firms, particularly through the STAR Market and ChiNext, where over 80% of listed companies are privately owned. Vice Chairman Li Chao reaffirmed efforts to streamline IPO approvals and promote equity-based financing solutions, with an emphasis on sectors aligned with national strategic priorities.

State-owned banks are expected to play a more active role in channeling funds to private firms. Industrial and Commercial Bank of China (ICBC) Chairman Liao Lin announced that the bank will provide at least 6 trillion yuan ($833 billion) in financing to private enterprises over the next three years, focusing on long-term credit and supply chain finance solutions.

In a bid to enhance supply chain finance, the PBOC, the CSRC, and the National Financial Regulatory Administration are jointly drafting new regulations to standardize practices in the sector. These measures aim to improve transparency, facilitate SME access to working capital, and mitigate the credit risk differentials that have long hindered smaller private businesses from securing stable financing.