The downgrades were among many reasons the government has tightened some curbs on borrowing since the end of the autumn. Beijing has particularly clamped down on lending by online finance companies and other private sector businesses that bypass the state-controlled banking system.
While commercial banks have continued to lend the money they hold from deposits, these conventional loans go mainly to state-owned enterprises. Private lenders, meanwhile, charge interest rates that are double or triple the 6 percent charged by banks, but they are often the only source of financing for small businesses.
Despite the higher interest rates, “we should also fully affirm the significance of private loans, which are an important supplement” to bank lending in the Chinese economy, said Mr. Yi, speaking at the Lujiazui Forum, an annual gathering in Shanghai of China’s top financial regulators. The forum, held at the start of each summer, is one of the Chinese government’s main channels for signaling the direction of Chinese monetary and financial policy.
Even before deciding on Thursday morning not to match the Fed’s rate increase, though, the Chinese government had already made a pair of moves that appear to have been elaborately crafted to channel more money to smaller, more entrepreneurial businesses.
At the start of this month, the central bank said that commercial banks could use some of their small business loans as collateral for borrowing money at low interest rates directly from the central bank. And on April 17, it told commercial banks that they could reduce the amount of money they set aside unprofitably as reserves, provided that they took actions that would leave them with more cash to lend to small and midsize businesses.
Gary Liu, the president of the China Financial Reform Institute, a Shanghai-based research group, said on the sidelines of the Lujiazui Forum that China’s private-sector companies of all sizes, even large ones, had long faced challenges in obtaining loans. But the credit squeeze on them this spring has been particularly painful.
“It’s very bad, and we see not just small and medium-sized enterprises defaulting but even big companies defaulting,” he said.