1. Central bank lending for rural development. Introduced in 1999, this instrument is issued to locally incorporated financial institutions to guide them to expand credit supply to the agricultural sector and reduce the financing costs related to agriculture, rural areas and rural people. Eligible institutions include rural commercial banks, rural cooperative banks, rural credit cooperatives, and village and township banks. For loans granted under this category, the PBOC provides the lenders with funds equal to 100 percent of the principal. This is a long-term instrument.
2. Central bank lending for MSBs. Introduced in 2014, this instrument is issued to locally incorporated financial institutions to guide them to increase credit supply to MSBs and private enterprises and reduce their financing costs. Eligible institutions include city commercial banks, rural commercial banks, rural cooperative banks, village and township banks, and private banks. For loans granted under this category, the PBOC provides the lenders with funds equal to 100 percent of the principal. This is a long-term instrument.
3. Central bank discounts. Central bank discounts are transactions made by the PBOC to discount financial institution-held bills that have already been discounted. Introduced in 1986, this instrument has started to play its role in adjusting the financing structure in 2008. It is mainly designed to increase financing for rural development, MSBs, and private enterprises and is applicable to banking institutions qualified to conduct discount businesses, including commercial banks licensed to operate nationwide, locally incorporated banks, and foreign-funded banks. This is a long-term instrument.
4. The instrument supporting inclusive MSB loans. Following the decisions of State Council executive meetings, the PBOC launched the instrument supporting inclusive MSB loans in December 2021. The instrument helps locally incorporated financial institutions and encourages them to continuously increase MSB loans. The PBOC provides the lenders with incentive funds based on a percentage of the incremental balance of their MSB loans. This is a temporary instrument. The instrument is effective from 2022 to end-2024, and it is implemented on a quarterly basis.
5. The pledged supplementary lending (PSL) facility. Initiated by the PBOC in 2014, this instrument mainly supports key areas including shantytown renovation, construction of underground pipelines, major water conservancy projects, and initiatives of “going global.” Eligible institutions include China Development Bank (CDB), Agricultural Development Bank of China (ADBC), and the Export-Import Bank of China (CEXIM). For loans granted under the PSL, the PBOC provides the lenders with funds equal to 100 percent of the principal. This is a temporary instrument.
6. The carbon emission reduction facility (CERF). Following the decisions of State Council executive meetings, the People’s Bank of China (PBOC) in concert with the National Development and Reform Commission (NDRC) and the Ministry of Ecology and Environment (MEE) launched the CERF in November 2021. The CERF is available to 21 financial institutions licensed to operate nationwide, some foreign-funded financial institutions and locally incorporated financial institutions to extend targeted support to three important fields of carbon emission reduction, namely clean energy, energy conservation and environmental protection, and carbon emission reduction technology. For loans granted under the CERF, the PBOC provides the lenders with low-cost funds equal to 60 percent of the principal. This is a temporary instrument. Approved by the State Council, it is effective from 2021 to end-2024 and is implemented on a quarterly basis.
7. The special central bank lending for the clean and efficient use of coal. Following the decisions of State Council executive meetings, the PBOC, together with the NDRC and the National Energy Administration (NEA), launched a special central bank lending facility in November 2021 to promote the clean and efficient use of coal. The lending facility is available to seven financial institutions operating nationwide, namely the CDB, the CEXIM, the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China (ABC), Bank of China (BOC), China Construction Bank (CCB), and the Bank of Communications (BOCOM). It provides targeted support for large-scale clean production of coal, the application of clean combustion technologies and other five areas. Meanwhile, the instrument boosts the capacity of coal mining, utilization and storage. For loans granted under this facility, the PBOC provides the lenders with low-cost funds equal to 100 percent of the principal. This is a temporary instrument. It is effective from 2021 to end-2023 and is implemented on a monthly basis.
8. The central bank lending for sci-tech innovation. Following the decisions of State Council executive meetings, the PBOC, together with the MIIT and the MOST, launched a central bank lending facility for sci-tech innovation in April 2022. The lending facility, available to 21 financial institutions licensed to operate nationwide, provides targeted support for sci-tech innovation enterprises, such as new- and high-tech enterprises, small- and medium-sized enterprises with specialized know-how, sophisticated operation, unique products, and innovative capabilities, national model enterprises for technological innovation, and top enterprises in particular areas of the manufacturing sector. For loans granted under this facility, the PBOC provides the lenders with low-cost funds equal to 60 percent of the principal. Implemented on a quarterly basis, this is a temporary instrument.
9. The special central bank lending for inclusive elderly care services. Following the decisions of State Council executive meetings, the PBOC and the NDRC jointly launched the special central bank lending for inclusive elderly care services in April 2022. This lending facility, available to seven financial institutions licensed to operate nationwide, namely the CDB, the CEXIM, the ICBC, the ABC, the BOC, the CCB, and the BOCOM, extends targeted support to eligible inclusive elderly care service providers. At the initial stage, a pilot program is carried out in five provinces, namely Zhejiang, Jiangsu, Henan, Hebei, and Jiangxi. For loans granted under this facility, the PBOC provides the lenders with low-cost funds equal to 100 percent of the principal. This is a temporary instrument, effective for two years for the time being. It is implemented on a quarterly basis.
10. The special central bank lending for transport and logistics sectors. According to the decisions of State Council executive meetings, the PBOC, together with the Ministry of Transport (MOT), launched the special central bank lending for the transport and logistics sectors in May 2022. The lending facility, available to seven financial institutions licensed to operate nationwide including the ADBC, the ICBC, the ABC, the BOC, the CCB, the BOCOM, and the Postal Savings Bank of China (PSBC), targets at road freight operators, and micro, small and medium-sized logistics, warehousing and distribution (including express delivery) companies. For loans granted under this facility, the PBOC provides the lenders with low-cost funds equal to 100 percent of the principal. This is a temporary instrument. It is effective from May 2022 to end-June 2023 and is implemented on a monthly basis.
11. The special central bank lending for equipment upgrading and renovation. Following the decisions of State Council executive meetings, the PBOC in concert with the NDRC, the Ministry of Finance (MOF), the National Audit Office (CNAO) and the China Banking and Insurance Regulatory Commission (CBIRC) launched the special central bank lending for equipment upgrading and renovation in September 2022. The lending facility, available to 21 financial institutions licensed to operate nationwide, supports eligible institutions to provide loans to manufacturing industry, social service sectors, micro, small and medium-sized enterprises (MSMEs) and self-employed businesses for equipment upgrading and renovation. For loans granted under this facility, the PBOC provides the lenders with low-cost funds equal to 100 percent of the principal. This is a temporary instrument. As of now, it is effective from September 2022 to end-2022 and is implemented on a monthly basis.
12. Facilities supporting interest rate cut on inclusive micro and small business (MSB) loans. According to the decisions of State Council executive meetings, the PBOC supported eligible financial institutions to cut interest rate on MSB loans by one percentage point in the fourth quarter of 2022. For 16 financial institutions licensed to operate nationwide and locally incorporated financial institutions, the PBOC provides funds equal to the amount of their actual interest rate reduction as incentives. This is a temporary facility. As of now, it is effective for the fourth quarter of 2022 and is implemented on a monthly basis.
13. The tollway loan facility. According to the decisions of State Council executive meetings, the PBOC supported 21 financial institutions licensed to operate nationwide to cut interest rate on tollway loans by 0.5 percentage point in the fourth quarter of 2022. The PBOC provides funds equal to the amount of their actual interest rate reduction as incentives. This is a temporary facility. As of now, it is effective for the fourth quarter of 2022 and is implemented on a quarterly basis.
14. The private enterprise bond financing facility (Phase II). Approved by the State Council, the PBOC resumed the private enterprise bond financing facility in October 2022 to provide central bank lending for professional institutions to stabilize and promote private enterprise bond financing through market-oriented operation. This is a temporary facility. As of now, it is effective from November 2022 to end-October 2025.
15. Guaranteed residential building delivery loan program. Following the decisions of State Council executive meetings, the PBOC launched the guaranteed residential building delivery loan program. The program is available to six financial institutions licensed to operate nationwide, namely the ICBC, the ABC, the BOC, the CCB, the BOCOM and the PSBC. It could be expanded to incorporate 18 financial institutions licensed to operate nationwide, supporting them to issue loans to overdue residential projects for timely delivery. For loans granted under this program, the PBOC provides the lenders with funds equal to 100 percent of the principal. This is a temporary facility. As of now, it is effective from November 2022 to end-May 2024 and is implemented on a quarterly basis.
16. Special central bank lending for troubled property developers. Following the decisions of State Council executive meetings, the PBOC launched the special central bank lending for troubled property developers in January 2023. The instrument is available to five nationwide financial asset management companies, namely China Huarong Asset Management Co., Ltd., China Great Wall Asset Management Co., Ltd., China Orient Asset Management Co., Ltd., China Cinda Asset Management Co., Ltd., and China Galaxy Asset Management Co., Ltd., supporting them to defuse risks of projects of troubled property developers through mergers and acquisitions. For funds utilized under this instrument, the PBOC provides the lenders with funds equal to 50 percent of the actual investment amount of the mergers and acquisitions. This is a temporary instrument, effective from January 2023 to end-2023 and is implemented on a quarterly basis.
17. Loan support scheme for rental housing. Following the decisions of State Council executive meetings, the PBOC launched the loan support scheme for rental housing in February 2023. The pilot program is carried out in eight cities, namely Chongqing, Jinan, Zhengzhou, Changchun, Chengdu, Fuzhou, Qingdao and Tianjin, supporting market-based acquisition of stock housing in batches, and expanding rental housing supply. The scheme is available to seven financial institutions licensed to operate nationwide, namely the CDB, the ICBC, the ABC, the CCB, the BOCOM and the PSBC. For loans granted under this scheme, the PBOC provides the lenders with funds equal to 100 percent of the principal. This is a temporary scheme, effective from February 2023 to end-2024 and is implemented on a quarterly basis.
