China Asks Banks to Bankroll Tech in Latest Private Sector Boost

China will explore the creation of a platform through which smaller tech firms can borrow via high-yield bonds, confirms Blooberg report.

A plethora of Beijing officials have in recent weeks talked about measures to prop up private firms, regarded as key to resuscitating a sputtering economy. On Thursday, the central bank asked lenders and financial markets to provide more support for innovation and tech-related acquisitions and to boost investment in startups.

In one of the more concrete measures outlined, China will explore the creation of a platform through which smaller tech firms can borrow via high-yield bonds, confirming a Bloomberg News report from June.

China will “push for more financial resources to be poured into the real economy and innovative areas, in order to facilitate building the country into a technology power and achieve tech self-reliance and self-improvement,” said Zhang Qingsong, deputy governor of the People’s Bank of China, during a briefing.

Chinese tech stocks surged this week on hopes that Beijing is ready to unfetter the pivotal sector, after subjecting the likes of Alibaba Group Holding Ltd. and Tencent Holdings Ltd. to punishing scrutiny from late 2020. With Beijing’s official growth target of about 5% at risk, Xi Jinping’s government has embarked on a messaging campaign to woo investors and companies bruised by years of regulatory campaigns.

This month, Beijing sent some of its clearest signals yet that it’s ready to lift some of those curbs and unshackle the tech sector to again help drive the world’s No. 2 economy, just when it’s most needed. Officials also pledged stimulus measures for other key pillars of growth such as property and consumption.