Circular of the People's Bank of China, the National Development and Reform Commission, the Ministry of Finance, the China Banking Regulatory Commission, the China Securities Regulatory Commission, the China Insurance Regulatory Commission, and the State Administration of Foreign Exchange on Issuing the Framework Plan for the Financial Service Reform and Innovation Pilot Area for Small and Micro Businesses in Taizhou, Zhejiang Province

Yin Fa [2015] No. 375

December 11, 2015

Zhejiang Provincial People's Government,

The Framework Plan for the Financial Service Reform and Innovation Pilot Area for Small and Micro Businesses in Taizhou, Zhejiang Province has been approved by the State Council and is hereby issued for implementation.

Framework Plan for the Financial Service Reform and Innovation Pilot Area for Small and Micro Businesses in Taizhou, Zhejiang Province

This Plan is formulated in accordance with the strategic decisions of the CPC Central Committee and the State Council, and the requirements of the Opinions of the State Council on Supporting the Sound Development of Small and Micro Businesses (Guo Fa [2014] No. 52), and the Opinions of the General Office of the State Council on Providing Financial Support for the Development of Small and Micro Businesses (Guo Ban Fa [2013] No. 87), with a view to further reforming the financial service system and institutions for small and micro businesses, expediting the innovation of financial services, improving the financial service system and optimizing the financing environment for small and micro businesses, and promoting the inclusive financial development and real economic restructuring and upgrading.

I. General Requirements
(I) Guidelines. To follow the guidance of Deng Xiaoping Theory, the important thought of Three Represents, and the scientific outlook on development, comprehensively implement the guiding principles of the 18th National CPC Congress and the third to fifth plenary sessions of the 18th Central Committee, upgrade financial services to support real economy, and improve the financial service system for small and micro businesses in particular by launching pilot projects for financial service innovation in some areas, give full play to the role of private capital in supporting the development of small and micro businesses, establish a sound financing assurance system, expand the depth and breadth of financial services, and provide strong support for the sustainable development of small and micro businesses and for the restructuring and upgrading of real economy.
(II) Basic Principles
Demand-oriented scientific planning. To make scientific plans and overall arrangements for the reform and innovation of financial services for small and micro businesses according to the rules of financial operation and the actual requirements for the development of real economy, starting from easy issues before moving on to harder ones in a gradual manner.
Making major breakthroughs by launching pilot projects. To eliminate system and institutional obstacles to financial services for small and micro businesses, solve financing difficulties faced by small and micro businesses, and explore efficient, convenient, sustainable and replicable financial service patterns for small and micro businesses; launch pilot projects for reform in key areas and key processes, and promote successful experiences gained in pilot projects to other areas.
Government guidance and market operation. To give play to the leading role of government in improving financial services for small and micro businesses, increase efforts to build guarantee and credit systems, and improve the risk compensation and innovation incentive systems; give play to the decisive role of the market in allocating resources, adhere to market-oriented operation, improve the operating mechanism, and raise the service capability and efficiency.
Highlighting the features and exploring new ways. To explore new ways of effective financial services for small and micro businesses according to the regional features of Taizhou, accumulate experiences in financial services for small and micro businesses through mode innovation, professional training, and expansion of service areas, and promote successful experiences to other areas.
(III) Major objectives. To significantly increase the financing coverage for small and micro businesses, reduce the financing costs, expand the financing scale, improve the financing service quality, optimize the financing climate, and establish a convenient and highly efficient financial service system for small and micro businesses within three to five years; explore new ways and accumulate experiences of financial service reform and promote good practices throughout China.

II. Major Tasks
(I) Supporting the improvement and upgrading of small and micro businesses. To perfect the business training mechanism and promote mass entrepreneurship and innovation; foster entrepreneurship, give play to the role of capital in driving the development of businesses, and improve the innovation efficiency; increase investment in human resources to improve the quality of workers, and promote the upgrading of the processing technology, product quality and brand value of small and micro businesses; encourage small and micro businesses to optimize their corporate governance, standardize their operations and improve their operating efficiency, innovation capabilities and profitability; enhance the construction of e-commerce infrastructure and provide efficient and convenient service platforms for business innovation for small and micro businesses to improve their market competitiveness.
(II) Improving the financial organization system at various levels. To integrate and reconstruct the existing financial service outlets in Taizhou, expedite the establishment of community banks and special service outlets in communities, commercial areas and industrial zones to provide tailored and differentiated banking services; encourage and guide commercial banks to increase credit support for small and micro businesses in their respective regions; support city commercial banks in increasing their service outlets, improving the services of their lower-level branches, implementing the loan commitment system for newly-established county-level branches, and establishing special financial service institutions for small and micro businesses; support the efforts of private and city commercial banks in Taizhou to expand and improve their businesses; allow eligible private capital operators to establish small and medium-sized financial institutions under government supervision; create conditions to attract foreign banks; accelerate the joint stock reform of rural cooperative financial institutions, support high-quality private businesses increasing their investment; increase the coverage of village/township banks, credit companies, rural financial cooperatives, and small-loan credit companies; encourage standardized development of small-loan credit companies, and encourage high-quality small-loan credit companies to expand business; and establish a sound assessment system for financial services for small and micro businesses.
(III) Promoting innovation of financial products and services for small and micro businesses. To expedite the research and development of new financial products in accordance with the requirements of small and micro businesses, and expand the application and re-innovation of characteristic products; further improve the information platforms for financial products for small and micro businesses, and public service platforms for small and medium-sized businesses; promote the establishment of financial supermarkets and convenient stores; improve the micro-finance technology, explore and establish loan applicant appraisal models and mechanisms for small and micro businesses; improve online credit services, explore new ways of in-depth integration of conventional micro-finance technology and modern information technology, enhance cooperation between banks and e-commerce operators, and improve financial services for small and micro businesses based on big data and Internet technologies; explore new ways of repayment; promote online and mobile payments; expand the application of financial IC cards in public service areas, encourage the innovative application of mobile finance in the e-commerce sector; support online payment service innovations, expand the service areas, and explore new ways and new patterns of online financial services for small and micro businesses; support the innovation of foreign exchange services of local financial corporations, launch or jointly launch pilot projects for the business development for RMB and foreign currency derivatives, and develop export policy pledge financing business.
(IV) Expanding the financing channel for small and micro businesses. To support direct financing on domestic and international markets by growth, technology or innovation-oriented small and micro businesses if eligible; support the issuance of short-term bonds, medium-term notes, SME collective notes, regional optimal notes, corporate bonds, etc. by eligible small and micro businesses, and encourage financing by asset-backed securitization; explore new ways of cross-border financing; promote the development of private equity investment funds and venture capital companies, accelerate the asset acquisition and regrouping, promote the development of emerging industries and the upgrading the economy; make full use of the existing equity and property right exchanges in Zhejiang to promote the restructuring, comprehensive property right transfers and financing of unlisted small and micro businesses; explore the possibility of establishing private financial service centers for small and micro businesses.
(V) Establishing a sound financing guarantee and insurance system for small and micro businesses. To further improve and utilize the credit assurance fund for small and micro businesses in Taizhou; promote the development of government-supported financing guarantee institutions, perfect the credit guarantee risk sharing and compensation system, and increase support for financing guarantee for small and micro businesses; explore the possibility of establishing an integrated commercial and policy guarantee system, encourage banks and insurance companies to jointly explore insurance patterns for small and micro loans, and promote cooperation between banks and insurance companies; increase the small-loan guarantee and credit insurance coverage, develop new and integrated insurance products in accordance with the requirements of small and micro businesses, and give play to the role of insurance policies as confidence builders; explore the possibility of establishing a corporate bond interest or guarantee subsidy system for small and micro businesses; establish government financial development funds, perfect the risk compensation system, and provide guarantee for risk sharing and compensation.
(VI) Establishing a local social credit system. To establish a credit reward/punishment system to promote creditability; encourage local governments to publish and share information, optimize their credit information platforms for small and micro businesses, specialized rural cooperatives, and rural households so as to allow for the sharing of credit information between different departments, and establish an integrated information system with information and credit rating services, as well as technical training, business assessment, and functions of fostering and building confidence; promote the establishment of creditable villages, communities, towns and neighborhoods, and the establishment of pilot areas for the credit system construction for small and micro businesses.
(VII) Enhancing financial service communication and cooperation for small and micro businesses. To improve the financial service communication and cooperation system for small and micro businesses between the mainland and Taiwan to enhance bilateral communication and training of financial talents; strive to attract financial education and training institutions from Taiwan to set up branches in Taizhou, and introduce advanced management practices and ideas from Taiwan financial service institutions for small and micro businesses; introduce financial institutions from Taiwan, explore the possibility of establishing joint-venture securities companies, fund companies, and securities investment consulting and research institutions.
(VIII) Optimizing the financial regulation and risk prevention mechanism. To establish a sound supervision and assessment system, encourage and guide financial institutions to increase the support and improve the service quality for small and micro businesses; establish a local financial risk prevention and control system, improve the local financial regulation and coordination system and financial emergency response plans; enhance the sense of responsibility and clarify the responsibilities of the local governments to deal with financial risks and maintain financial stability in their respective regions to prevent systemic or regional financial risks; enhance the dynamic monitoring of business capital chain risks and guarantee chain risks, and establish a financial risk precaution system; formulate small and micro finance index to guide the business development in the sector; standardize the financing conduct of private businesses, and crack down on illegal financial operations such as evading and rejecting financial debts, and illegal fundraising according to the law.

III. Assurance Measures
(I) Enhancing organization and coordination. To form a leadership team for centralized planning, leadership and organization of the overall work of the pilot area, and for the formulation of financial service reform and innovation plans for small and micro businesses; establish a working mechanism where operations of various units are coordinated by the functional departments of the provincial, municipal and county (city, district)-level governments under the guidance of the related department of the State Council.
(II) Increasing policy support. To support the business development of eligible city commercial banks in terms of interbank deposits, credit asset securitization, and financial debts of small and micro businesses within the framework of the national financial policies; open green channels, optimize the assessment standards and examination/approval processes, and improve the intervals of prudential assessment, record filing and issuance; provide policy support for banking financial institutions that have made outstanding achievements in financial services for small and micro businesses in reserve-deposit ratio, consensus loan, market access, business innovation, relending to small businesses, and rediscount; and provide policy support for other significant issues encountered in the course of reform with the approval of related departments.
(III) Enhancing assessment and supervision. To establish a target responsibility system with defined duties and responsibilities for innovation targets incorporated in annual assessment plans, and improve the related reward and punishment system to ensure that solid progress and satisfactory results are achieved in the reform and innovation of financial services for small and micro businesses.
(IV) Guaranteeing an adequate supply of qualified professionals. To explore new incentives for high-end financial professionals; establish a financial research institute for small and micro businesses; support the establishment and operation of specialized training schools by city commercial banks and other financial institutions, increase investment in vocational training, and promote in-depth cooperation with institutions of higher education in cultivating financial service professionals for small and micro businesses.