On December 9, Country Garden successfully issued, in the book entry form, the second tranche of corporate bonds in 2022 on the SZSE market. SZSE successfully launched the first pilot projects of financing support for private-owned property enterprises under the “central-local government cooperation model” on the market and realized full credit enhancement support. The issuing scale of the bonds of this tranche totaled CNY 1 billion, including CNY 800-million Type I bonds and CNY 200-million Type II bonds. China Securities Finance Corporation Limited (CSF) and underwriter China Securities Co., Ltd. have jointly established a full credit protection certificate for the Type I bonds, and Guangdong Join-Share Financing Guarantee Investment Co., Ltd. provides full bond guarantee for the Type II bonds.

The successful launch of the new “central-local government cooperation” credit enhancement model for private-owned real estate enterprises is the product of the joint efforts of SZSE, CSF, underwriters and local guarantee companies under the guidance of CSRC. It is also another useful attempt to improve the bond financing support mechanism for private-owned enterprises (POEs) and address the difficulties faced by POEs in accessing financing. The model received positive reaction from the market and formed good demonstration effect.

In recent years, under the unified guidance of CSRC, SZSE has continuously improved the bond financing support mechanism for POEs and supported property enterprises’ reasonable financing needs.

First, SZSE has strengthened the financing credit support for the private economy to reduce enterprises’ financing cost.SZSE has encouraged and guided market institutions to, independently or together with CSF, provide credit enhancement support to the bond financing by POEs including private-owned property enterprises. Since the beginning of the year, such support has been extended through credit enhancement to the financing by a number of private property enterprises or private industrial companies including Longfor, Country Garden, Sany Financial Leasing, etc., which has produced actual effect in reducing their financing cost. The interest rates of several protected bonds or asset-backed securities are lower than their prior levels.

Second, SZSE has deepened the implementation of financing support policies to expand financing channels for POEs.SZSE has put forth effort to provide good financing services for small and medium POEs, supported property enterprises’ normal financing activities, and assisted quality property enterprises increasing bond financing scale. Since 2022, a total of CNY 81.7-billion corporate bonds of POEs have been issued. Meanwhile, on the basis of stable risk control, SZSE has supported quality property enterprises applying for an additional bond issue of nearly CNY 100 billion.

Third, SZSE has continuously launched innovative products that serve the real economy and guided social capital to flow into the areas of real economy in urgent need.SZSE has developed innovative products including the supply chain financial ABS for core enterprises and the securitization of intellectual property to help SMEs in the upstream of supply chain make better use of their receivables from core enterprises, expand the financing channels for private tech companies, and turn “intellectual property” into “assets”, thus realizing low-cost financing. So far, the supply chain receivables ABS of core enterprises of SZSE has exceeded CNY 730 billion and SZSE has supported 10 cities issuing 72 intellectual property securitization products, which has raised funds of CNY 17.7 billion and benefited 1,043 private tech companies.

Fourth, SZSE has given full play to the role as market organizer to build the market confidence and consensus.Since 2022, SZSE has held two forums on financing by POEs and two forums on protection instruments business. Regulators, local governmental departments and representatives of market entities were invited to discuss pragmatic measures to support financing by POEs.

Next, SZSE will continue to study and implement in depth the guiding principles of the 20th CPC National Congress and firmly put in place the decisions and plans of the CPC Central Committee and the State Council. We will follow the plans and requirements of CSRC andwork unswervingly both to consolidate and develop the public sector and to encourage, support and guide development of the non-public sector. We will give better play to our roles as the market organizer, bridge and bond to pool the efforts of all relevant parties to launch more innovative products and mechanisms. We will use diversified instruments including stocks, bonds and REITs simultaneously to empower the stable, healthy development of the real estate industry, keep refining the bond financing support mechanism for POEs, and improve the effectiveness of the exchange’s market services for the real economy.