(Yicai) March 3 -- As long as inflation pressure remains manageable, the Chinese government will make sure that financing costs for private companies stay at a low level for an extended period of time, Pan Gongsheng, the governor of the People’s Bank of China, said at a recent meeting with industry leaders.

Regulators are preparing to roll out a raft of new measures aimed at lowering the borrowing costs of private firms and at offering more diverse financing options, Yicai learned at the symposium that was held on Feb. 28 and was attended by the country's financial authorities and a number of financial institutions and private firms, including car giant Geely Holding Group.

In the current economic downturn, some private companies have seen a drop in profits and shrinking cash flow. At the same time, banks have become more cautious in their risk assessments, which has made it harder for companies to secure financing.

China’s financial regulators attach great importance to the issues raised by companies regarding financial services, Pan said. "In recent years, we have designed a number of structural monetary policy tools, such as the inclusive micro-loan support tool and the re-lending facility for technological innovation. This year, we will continue to make full use of these tools," he added.

Special re-loans should be introduced to address the financing needs of ranches which wish to expand, said Liu Chunxi, senior executive president of dairy producer Inner Mongolia Yili Industrial Group. Banks should direct credit into the livestock industry to provide vital support for farms, he added.

Demand for funding in the artificial intelligence sector is enormous due to the high research and development costs, long development cycles and significant risks, said Xu Li, chairman and chief executive officer of AI firm SenseTime. Many companies in the sector are having difficulty raising money. More targeted support should be put in place for the AI industry, he added.

In view of the long cycle, large scale and higher risks involved in investing in tech startups, People’s Insurance Company of China will focus on key industries like AI, humanoid robots and renewable energy in order to develop exclusive products and services, said Zhao Peng, president of the Beijing-based company.

Zhao also recommended relaxing restrictions on insurance funds investing in venture capital funds to better support private tech firms, small businesses, and emerging industries.

Industrial and Commercial Bank of China will focus on directing resources to support private companies and streamlining financing channels for equity, debt and loans, said Chairman Liao Lin. The plan is to provide no less than CNY6 trillion (USD822.8 billion) in investment and financing to private companies over the next three years, while increasing the supply of credit and medium-to long-term funds.

Stronger support for mergers and acquisitions of private companies in the ‘hard-tech’ sector is needed, said Zhou Yingguang, general manager of brokerage CITIC Securities. He proposed relaxing time limits and adjusting standards for restructuring plans in market-driven acquisitions, as well as making the evaluation of loss-making hard-tech firms more flexible.

Moving forward, the National Financial Regulatory Administration will supervise banks and insurance companies to ensure a steady supply of quality credit and implement policies for extending loans without repayment of the principal, said Deputy Director Zhou Liang.

In the next steps, the Shanghai Stock Exchange will enhance the role of the bond market and increase support for private companies' bond financing, said Deputy General Manager Yuan Duoran. It will also support industrial enterprises in issuing bonds aimed at supporting micro and small businesses, as well as key products for high-growth industries.

Editor: Kim Taylor