China Has Been Lending Money To Small And Micro Businesses As New Growth Engine

Chinese corporate giants have been on regulatory watch and face reformation in the wake of serious misdeeds by the likes of Evegrande whose liability heads into US$300 billion, Didi which shares have crashed after it was accused of mining user data and Alibaba whose prolific leader Jack Ma was halted in his steps hours before listing his Ant Financial.

But, China is a big nation engulfing one-third of Asia and with a massive economy rivaling the US, being the largest by a mere 15%, which analysts estimate could be overtaken within the next couple of years.

While the Middle Kingdom fixes its corporates, it has been actively nurturing the Small and Micro Enterprises growing them to become the next economic engine for the country. China knows that if it is to keep the economy humming it cant entirely depend on its Tencent or ByteDance, it needs robust domestic industry to provide jobs and keep cities and towns progressive.

In aiding the sector, China lent out RM12 trillion in loans to small and micro businesses at the end of November, this was nominally a rise of 24.1 percent compared to a year ago, according to the China Banking and Insurance Regulatory Commission.

During the period spanning January-November last year, new loans alone hit RM13 trillion with a focus on manufacturing and infrastructure construction, according to the commission.

This is a clear indication of how China is taking market-oriented approaches to strengthen financial support for micro, small and medium-sized enterprises.

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