Central bank head praises OECD report

Zhou Xiaochuan, the governor of the People's Bank of China, said on Thursday that he would support efforts to develop policy recommendations on diversified financing for small- and medium-sized (SMEs) enterprises during China's G20 presidency.

Zhou Xiaochuan made his remarks in welcoming a new report from the Organization for Economic Co-operation and Development (OECD) on SMEs.

The report, Financing SMEs and Entrepreneurs 2016: An OECD Scoreboard, was issued in Washington on Thursday prior to the G20 finance ministers meeting.

China will host the 11th G20 summit, for the first time, in Hangzhou, East China's Zhejiang province in September.

"The OECD Scoreboard is a valuable tool to support G20 work, and to monitor trends and the implications of financial reforms for SMEs," Zhou said. "It will not only enrich G20 discussion, but will also provide reference for the G20 policy maker."

The fifth annual edition of the OECD Scoreboard highlights developments in SME financing over the 2012-2014 period.

In China, SMEs made up 97 percent of all firms, accounting for 80 percent of urban employment, and for 60 percent of total GDP in 2013, according to the Scoreboard.

"SMEs and entrepreneurs can play an active role in achieving stronger and more inclusive growth, and it is now time to show our commitment to enabling the development of alternative funding options," Zhou said.

"Governments are increasingly supporting the news developments of SME financing instruments. This is consistent with the G20 and OECD high-level principles for SME financing, which was welcomed by the leaders in Antalya in 2015," said Angel Gurría, secretary-general of the OECD. "Chinese President Xi has been leading the way, leading the charge about SMEs."

In 2014, the Chinese government reformed the commercial registration system, and shortened registration procedures for SMEs.

The reform had a big impact on business creation in China. As shown in the report, in 2014 there were 12.9 million new companies registered in China, an increase of 14 2 percent from 2013. That means there were about 10,600 new companies created every day in China.

China is considering a plan that would allow banks to swap bad debts for equity in the borrowing firm. The plan may help large and medium-sized companies, which "borrowed too much" to reduce their debt, Zhou said.

Globally, financing for SMEs has turned the corner from the decline seen during the global financial crisis, but overall credit conditions remain challenging and access to external finance continues to be much tighter for SMEs than larger firms, according to the OECD report.

"Finance is one of the keys for unlocking the potential of small firms to innovate, upgrade and become more productive," said Gurría. "We still have a lot to do, to create conditions for the diverse population for the SMEs, to access finance in appropriate amount, appropriate forms, appropriate terms."

leshuodong@chinadailyusa.com