China’s central bank is planning to provide 300 billion yuan, or $46.4 billion, in low-cost funding to aid banks in providing support for small- and medium-sized businesses (SMBs), according to Bloomberg on Wednesday (Sept. 1).
The money will come from the state’s relending facility. And at a recent State Council meeting, using the state’s rediscounting facility as part of the effort to aid smaller businesses was also mentioned.
Banks at the end of June reported around 888 billion yuan in outstanding SMB loans. They were funded through the relending facility.
These developments come as Beijing prepares to defend its economy from a coming slowdown that experts worry might be impending because of the measures put in place to curb the spread of the delta variant, along with other factors like tighter control of the property sector and a slowdown in demand for exports.
While Beijing has been committed to helping offset the issue, it hasn’t signaled that it plans a wide-scale stimulus measure.
PYMNTS wrote in August about what the potential ramifications of China’s crackdown on tech firms could be, writing that the new regulations have led to things like big fines, canceled mergers and public offerings put on ice. For example, Alibaba got hit with an antitrust penalty for $2.8 billion in April, and food delivery platform Meituan is under investigation for reportedly acting in anticompetitive ways.
Some of the latest rulings have included the State Administration for Market Regulation (SAMR) making a new framework in which online platforms “must not implement or assist in the implementation of unfair competition on the Internet, disrupt the order of market competition, affect fair transactions in the market,” and that the firms can’t leverage data or algorithms to re-route traffic or influence peoples’ retail decisions.
Read more: China’s Big Tech Crackdown Could Chill Innovation
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