Guizhou supports financing of industrial companies

Guizhou Sunward Fuquan Chemicals Co has benefited from investment by Guizhou Industrial Investment Co. [Photo/ddcpc website]

In 2021, Southwest China's Guizhou province improved the utilization of government finance and utilized various investing and financing methods to ease financial pressure on the province's industrial companies.

Last year, Guizhou established a fund of 7 billion yuan ($1.11 billion) to support a new model of industrialization development, an industrial financing guarantee company with a scale of 2 billion yuan, a fund of 1.7 billion yuan for loaning to small and medium-sized companies, and established Guizhou Industrial Investment Co.

As a result, the province attracted about 100 billion yuan in funds from banks and private capital, which drove the growth of the province's industrial investment by 19.7 percent year-on-year in 2021.

In 2021, the fund for a new model of industrialization development invested in 41 projects and attracted 24.25 billion yuan in social investment. Due to the fund, the Guizhou branch of the Industrial and Commercial Bank of China saw a 4.57-billion-yuan increase in loans for new-model industrialization that year, an increase of 13 percent year-on-year.

Meanwhile, the Guizhou branch of Agricultural Bank of China's industrial loans issued 2.4 billion yuan more than in 2020, an increase of 22 percent year-on-year.

Through investment in modern energy, modern chemistry, basic materials and big data, Guizhou Industrial Investment Co has promoted the launch of various major projects. In 2021, the company invested 4.43 billion yuan in 56 projects.

As a trusted management institution for loans to small and medium-sized companies, the company talked with 11 cooperative financial institutions to revise the management regulations and cooperation agreements for a financing risk compensation mechanism.

The mechanism allows the government to establish compensation funds to help small and medium-sized companies apply for loans from financial institutions, which can provide more financing options and reduce financing costs for those companies.

Wang Zuogong, a professor at Guizhou University of Finance and Economics, suggested Guizhou provide more support in residency, education and taxation to encourage more people to work and invest in Guizhou and government finance at all levels to invest in funds.

According to Wang, Guizhou should also encourage more State-owned enterprises and financial institutions to cooperate with the province's industrial fund management institutions and promote the interaction between local governments and industrial funds.