This Notice on further enhancing the financial support and services for the transportation and logistics industries is hereby issued to put the guiding opinions of the 20th CPC National Congress and the Central Economic Work Conference into action, build synergy, and support the high-quality development of the transportation and logistics industries and help create a strong transportation network in China.
I. Understand the Significance of Financial Support and Services for Transportation and Logistics
Transportation and logistics are the lifeblood of a market economy. The report to the 20th National Congress proposed to boost China’s strength in transportation by building an efficient and smooth logistics system and reducing distribution costs. The Central Economic Work Conference called for boosting the dynamism and reliability of the domestic economy. Providing transportation and logistics industries with adequate financial support and services, promoting industry improvements and upgrades, and helping create more robust businesses speak to politically well-aligned and people-centric financial programs. The financial sector is to adopt a people-centered philosophy of development, strengthen its political stance, focus on delivering adequate financial services to transportation and logistics industries. It should make full and effective use of policy instruments, and provide greater financial support to promote a vibrant and efficient domestic economy, stable industrial and supply chains, and the harmonized and sustainable development of the transportation and logistics industries in relation to the economy and society as a whole.
II. Financial Institutions Should Strengthen Organizational Safeguards, Internal Incentives, and Product Innovation
1. Improving organizational safeguards and internal incentives, and increasing credit support for the transportation and logistics industries. Banking institutions should optimize their work protocols and enhance organizational safeguards by specifying the leading departments and their responsibilities at both the head office and the branch level, developing detailed objectives and work plans, and ensuring top-down policy transmission and implementation, with the goal of providing adequate financial support and services to the transportation and logistics industries. They should strengthen internal incentives and constraints, better allocate their credit resources, encourage their branches to voluntarily offer reduced fees and other incentives, and provide more first-time and unsecured loans to the transportation and logistics industries. The head office of each national bank should submit the bank’s work plan and semi-annual progress report to the People’s Bank of China (“PBOC”) and the China Banking and Insurance Regulatory Commission (“CBIRC”) in a timely manner. The branches of national banks as well as locally incorporated banks should submit their work plans and progress reports to the local PBC branch and CBIRC office. The semi-annual progress report for a half-year period should be submitted by the end of the first month of the following half-year period.
2. Developing innovative credit products in line with the characteristics and needs of the transportation and logistics industries. Banking institutions should develop a wider range of innovative and appropriate credit products in line with the financing needs of enterprises and individuals in the transportation and logistics industries, and they should actively offer credits and revolving loans to better meet the operating needs of businesses. Banking institutions are encouraged to create accurate customer profiles through big data analysis and other means and to innovate in online unsecured loans that take into account the latest transactions and funds movements. On the condition of maintaining legal and regulatory compliance and keeping risks at manageable levels, banking institutions are encouraged to determine the down payment ratio, interest rate, and repayment period for truck loans; to appropriately raise the tolerance level for non-performing truck loans and transportation and logistics loans during certain periods of pandemic control and economic recovery; and to set out and enforce more detailed rules on no penalties for duly made loan decisions. For and based on the operations and needs of micro, small, and medium-sized enterprises (“MSMEs”), individual businesses, and truck drivers that operate in the transportation and logistics industries, banks, auto financing companies, financial leasing companies, finance companies of automobile groups, and non-financial-institution financial leasing companies may extend the repayment period for loans and rentals through market-based principles and negotiations with their customers, and may offer loan renewal support to eligible micro and small-sized businesses (“MSBs”) and individual businesses.
3. Improving the issuance of truck ETC credit cards. Banking institutions are encouraged to offer and process truck ETC credit cards in accordance with market-based principles and establish risk management models and mechanisms in line with the risk profile of such cards. Banking institutions should also offer—to the maximum extent possible while keeping the risks under control—credit support to such organizations as local government-backed financing guarantors, transportation and logistics enterprises, car dealerships, and freight platform companies that provide guarantees for truck ETC credit card applications.
III. Tap into the Guidance and Multiplier Effect of Structural Monetary Policy Instruments
4. Improving the central bank lending for the transportation and logistics industries. The central bank lending for the transportation and logistics industries will expand in coverage to specialized road-cargo transporters and operators, oversized road-cargo transporters and operators, dangerous-goods road transporters, road-cargo freight station operators, and micro, small, and medium-sized logistics and warehousing companies (independent legal entities that primarily engage in the logistics, warehousing, and delivery business). The availability period for such central bank lending facility is extended to the end of June 2023. Qualified banks should apply for the facility on a monthly schedule and submit the application materials before the tenth day (postponed accordingly in case of holidays) of the month following the disbursement of the loans.
5. Synergizing central bank lending and discount for rural development and MSBs. Central bank lending and discount for rural development and MSBs will support locally incorporated banks to (i) offer operating loans to qualified road and waterway cargo transporters; micro, small, and medium-sized warehousing and delivery (including express delivery) companies; and the owners of the two types of MSBs, the owners of individual businesses, and individual truck drivers (including those affiliated with transporters); and (ii) offer loans to MSMEs that hold road transport permits but are not primarily in the road transport business for purchasing vehicles and fuels, paying for the wages or service fees of drivers, and funding other activities in the transportation business.
IV. Provide Stronger Financial Support to Transportation and Logistics Projects to Boost China’s Strength in Transportation
6.Empowering supporting financing and other market-based funding schemes to support infrastructures and major projects in transportation and logistics sectors. Financial institutions should boost the supporting financing for transportation and logistics projects backed by policy-based and development-oriented financial instruments. They should also actively support the improvement of China’s integrated transportation networks, in particular the construction of strategic thoroughfares extending to Xinjiang, Tibet, and central and western regions or along rivers, borders, and coasts; the New International Land-Sea Trade Corridor; intercity transit routes; multimodal transportation; and roads to old revolutionary base areas. Development or policy financial institutions and commercial banks should strengthen their financing support for the 102 major transportation and logistics projects outlined in the 14th Five-Year Plan as well as the projects listed in the 14th Five-Year Plan for the transportation and logistics industries. They should ensure coordination of financing arrangements to help upgrade the rural thoroughfares, improve the basic road networks, connect urban and rural roads, build rural roads in support of local resources, industries, and tourism, and optimize rural delivery networks. They should also provide adequate financial services to shipping companies by offering more credit and insurance products for maritime and water transports and lowering the financing costs by an appropriate amount, and support the building of international shipping and inland waterway transportation networks.
V. Further Boost Financing Support Function of the Bond Market
7. Optimizing bond financing arrangements for transportation and logistics industries, and streamlining bond issuance. We should further tap into the financing function of the bond market to support the major investment and construction projects in the transportation and logistics sectors that align with the national development plans. We should support auto finance companies, financial leasing companies, and similar non-banking financial institutions to issue transportation- or logistics-themed financial bonds. Enterprises that engage in road and waterway freight transportation (including ports); logistical, warehousing, and delivery (including express delivery) services; and other areas of the transportation and logistics sectors are encouraged to seek finance through issuing corporate credit bonds in the interbank bond market. The National Association of Financial Market Institutional Investors (NAFMII) and other interbank infrastructures should, throughout the periods of pandemic containment and economic recovery, continuously offer fast-track channels to the relevant enterprises in relation to bond issuance, registration and depository, provide them with expedient issuance services, and optimize the related processes. They should also waive bond financing-related transaction fees to the extent practicable to reduce the financing costs, and simplify the bond financing procedures.
VI. Establish Sound Information Sharing Mechanisms to Simplify Information Gathering
8. Improving the whitelist system for enterprises and individuals in the transportation and logistics industries. Provincial-level transportation authorities should help municipal and county-level authorities to organize industry associations, chambers of commerce, and other social organizations to conduct in-depth surveys on transportation and logistics enterprises, individual businesses, and truck drivers, after the municipal and county-level authorities have first completed a thorough review of such information as the qualifications and assessed business reputation and creditworthiness of those businesses and individuals. Those transportation and logistics enterprises, individual businesses, and truck drivers that have been doing business in a lawful and honest manner, show bright prospect, and are interested in taking out loans should be added to the relevant whitelists which should be promptly and proactively shared with the banking institutions and local government-backed financing guarantors of the corresponding jurisdictions. PBOC branches and CBIRC local offices should guide banking institutions within their respective jurisdictions to meet the financing needs of the whitelisted businesses and individuals and to provide them with financial services in line with market-based principles.
9. Establishing information sharing and batch verification mechanisms. Each provincial-level transportation authority should establish an information sharing mechanism with the banking institutions within its jurisdiction. Taking into account the information needed for the corresponding banking services, provincial-level transportation authorities should work with the relevant units to make available the list of transportation and logistics enterprises and drivers containing such information as their qualifications, travel logs, electronic waybills, and traffic violations, and should actively assist banking institutions in verifying in batch the license information of transportation- and logistics-related borrowers, both to make it less costly for them to gather information and review loan applications and to reduce the burden of borrowers. The China Transport Telecommunications & Information Center (CTTIC), head offices of national banks, and other relevant institutions should work closer together and establish information sharing mechanisms. CTTIC and other relevant institutions should provide banking institutions with the information necessary for boosting credit supply, all without charge and while ensuring network and information security.
VII. Build Synergies to Enhance Support and Services
10. Promoting interest subsidy, credit enhancement guarantees, and other supporting policies. Local transportation authorities should coordinate with local financial regulatory authorities such that local government-backed financing guarantors, by cross-referencing the relevant whitelists, are more willing to provide credit enhancement to businesses, promptly assume delinquent loans in accordance with laws and agreements, and assist transportation and logistics enterprises, individual businesses, and truck drivers to obtain on-lending or loan renewals. Where conditions permit, local governments are encouraged to subsidize the interest on transportation and logistics loans (including rentals) and the financing guarantee fees, and to inject capital into government-backed financing guarantors. The financial inclusion demonstration zones are supported in taking advantage of the policies on interest subsidy, risk compensation and in providing supplementary capital to government-backed financing guarantors.
11. Promoting government-bank-enterprise coordination and policy publicity and interpretation. Local transportation authorities, PBOC branches, and CBIRC local offices should work with the local financial regulatory authorities, industry associations and chambers of commerce, and industrial parks with transportation and logistics enterprises in organizing government-bank-enterprise activities; raise the public’s understanding of the relevant financial policies through in-person visits, online events, and educational text messages; and improve the liaison channels. Financial institutions and financial leasing companies may set up service outlets and station customer service representatives in populated areas, and visit whitelisted businesses and groups, to quickly and efficiently respond to the public’s financial needs. Banks eligible for the special central bank lending facility for the transportation and logistics sectors should, through their websites, mobile banking portals, customer service numbers, and other appropriate means, publicize information about their transportation and logistics loan products and the corresponding application requirements, methods, and process, as well as the relevant telephone numbers of their branches, to make those products more accessible to truck drivers and other groups.
12. Establishing multi-level collaboration mechanisms to jointly supervise the implementation of policies. The Ministry of Transport (MOT), PBOC, and CBIRC should establish a collaboration mechanism and, based on the progress update reported by provincial collaboration mechanisms and relevant financial institutions, issue periodic situation reports, organize and coordinate the efforts of all parties to build synergy, and facilitate the transmission of financial support policies to improve the implementation of those policies. Local transportation authorities, PBOC branches, and CBIRC local offices should establish collaboration mechanisms at the provincial and municipal levels to jointly promote the efficient coordination between financial institutions at one end and fiscal, public security, and local financial regulatory authorities as well as road monitoring, financing guarantee, and other relevant organizations at the other. They should additionally follow up on and supervise the circulation of whitelists and the implementation of information sharing, license verification, government interest subsidies, credit enhancement guarantees, and other relevant policies; monitor and report their localities’ progress on the disbursement of transportation and logistics loans, the filings for central bank lending, fee reductions and incentive offers, and the disbursement of supporting financing for financial instruments; regularly resolve the difficulties arising from financial institutions’ credit supply activities and market entities’ loan applications; and organize government-bank-enterprise events and policy publicity and interpretation activities on a regular basis. Lastly, local transportation authorities, PBOC branches, and CBIRC local offices should compile progress updates every six months and submit them in the form of briefing reports to the higher-level coordination mechanism by the end of the first month of the following half-year period.
PBOC branches at or above the level of central sub-branches of sub-provincial cities are hereby requested to convey the requirements of this Notice to the relevant locally incorporated banking institutions, finance companies of automobile groups, and financial leasing companies within their jurisdictions.
People’s Bank of China
Ministry of Transport
China Banking and Insurance Regulatory Commission
February 13, 2023
