Sunday, May 19, 2019 | ePaper
China localities pledge support for private businesses
Authorities in many regions across China have pledged support for private enterprises in a bid to stimulate economic growth and boost job creation.
Beijing municipal government is offering customized services to help privately-owned firms address a wide array of issues.
Local authorities and social capital have set up a capital pool of 35 billion yuan (5 billion U.S. dollars) to help ease liquidity risks for publicly-traded firms which have pledged shares as collateral for loans,
Beijing mayor Chen Jining said in an interview, adding authorities will support private firms to issue bonds to raise funds.
Many firms in share pledge financing face the risk of margin calls when they need to deposit additional money to bring up the margin account to maintenance levels. If they fail to pay up when the stocks prices fall below the level agreed upon, lenders can sell the pledged shares, thus triggering further market volatility.
"The city government in Beijing will clear investment hurdles and open private capital to over 60 projects with a total investment of 100 billion yuan," Chen said.