All Are Heavyweight! A Quick Overview of the "Package of Financial Policies to Support Market Stability and Expectation Stabilization"

Following the successful conclusion of the State Council’s press conference on the theme of "a package of financial policies to support market stability and expectation stabilization" on May 7, we have received the signals of this package of financial policies, which mainly cover five key areas: monetary policy easing, breakthroughs in real estate financing, boosting confidence in the capital market, financial support for foreign trade, and the integration of technology and finance. The policies not only emphasize macro liquidity support but also focus on stimulating the micro vitality of the market.

(Source: http://www.scio.gov.cn/index.html)

1. Monetary Policy: "Precision Drip Irrigation" – Targeted Funding for Sci-Tech Innovation and Livelihood Consumption

The People’s Bank of China has accurately implemented ten policy tools, accelerating the flow of funds to key areas of the real economy. The market has responded positively, with the A-share Sci-Tech Innovation 50 Index rising by 1.8% on the same day;

(Source: Shanxi Securities Research Institute)

• New Energy Sector: Special re loans support leading enterprises in technological breakthroughs. For example, CATL (Contemporary Amperex Technology Co., Ltd.) publicly disclosed that it has obtained a 3 billion yuan loan to invest in solid-state battery research and development, shortening the construction cycle of the mass production line by 30%;
• Elderly Care Services: Structural tools guide the sinking of credit resources. The newly added community service points on Meituan’s "Yinian" (Elderly Care) platform have received low-cost fund support, with weekly service orders increasing by over 120%;
• Micro and Small Entities: The re loan policy for supporting agriculture and micro-enterprises has reduced financing costs. Zhejiang E-Commerce Bank has covered more than 1 million rural households through satellite remote sensing risk control technology, and its 3-minute rapid loan disbursement model has been included in the Digital Inclusive Finance Case Collection of the Ministry of Agriculture and Rural Affairs.

(Source: Wind Infomation)

2. Real Estate Financing: "Breaking the Deadlock for Rebirth" – Expanding the Scope of "Ensuring Housing Delivery" and Exploring Stock Conversion

The National Financial Regulatory Administration clearly stated: The scale of "housing delivery guarantee" white-list loans will be expanded to 6.7 trillion yuan, covering the construction of 16 million housing units; the management rules for development loans and urban renewal loans will be optimized, and the establishment of a real estate financing coordination mechanism will be accelerated.

Driven by the policies, the issuance scale of domestic bonds of the top 50 real estate enterprises in April increased by 25% month-on-month. Enterprises such as China Vanke and Greentown China have obtained the first batch of urban renewal loan approvals. At the local level, Zhengzhou has piloted a "trade-in" model, where state-owned enterprises purchase second-hand houses and convert them into indemnificatory housing. Over 2,000 units of inventory have been digested in two months, providing new ideas for resolving stock risks. However, industry differentiation has intensified, and some small and medium-sized real estate enterprises still face liquidity pressure, so the policy effect needs further observation.

(Source: Kaiyuan Securities Research Institute)

3. Capital Market: "Long-Term Funds Entering the Market" – Insurance Funds Increasing Investment and Breaking Through the Reform of Public Funds

The China Securities Regulatory Commission (CSRC) proposed: An additional 60 billion yuan of pilot quota for long-term investment of insurance funds will be added, and the stock investment risk factor will be reduced by 10%; the Action Plan for Promoting the High-Quality Development of Public Funds will be issued, introducing a floating management fee mechanism and incorporating investors’ profits and losses into the assessment.

China Life has recently increased its holdings of central enterprise ETFs (Exchange-Traded Funds) by more than 5 billion yuan, focusing on allocating to the new energy and semiconductor sectors. The reform of public funds is advancing simultaneously. The first-day subscription of "performance bet-type" funds (a type of floating-rate product) exceeded 2 billion yuan. The design of linking management fees to benchmark returns has reversed the "guaranteed income regardless of performance" model. Under the policy combination, the stability of the capital market has been enhanced, but the phenomenon of retail investors following the trend to speculate still needs to be vigilant.

(Source: CMB International)

4. Foreign Trade Finance: "Upgraded Escort" – From Credit Insurance to Digital Empowerment

The National Financial Regulatory Administration emphasized: Optimize export credit insurance, strengthen "one enterprise, one policy" support for enterprises affected by tariff shocks, and support the construction of overseas warehouses for cross-border e-commerce.

On the enterprise side: SHEIN has launched a "brand going global insurance" in collaboration with China Export & Credit Insurance Corporation (Sinosure), covering the risk of logistics rejection in 150 countries; Yiwu Small Commodity Market has accessed the cross-border payment system, and 30% of its export orders in April were settled through "one-click tax refund," increasing efficiency by 50%. At the regional level, the dividend of tariff reduction among RCEP (Regional Comprehensive Economic Partnership) member countries continues to be released, and orders from the Southeast Asian market have increased by 18% year-on-year, highlighting the resonance effect of policies and the market.

(Source: Myguide Securities)

5. Technology Finance: "Ecological Integration" – From Bond Guarantee to Risk Sharing

At the press conference, the People’s Bank of China and the National Financial Regulatory Administration jointly announced: The creation of a "sci-tech innovation bond risk-sharing tool" to support sci-tech enterprises in issuing bonds through re loans and guarantee mechanisms; the expansion of the sci-tech insurance pilot to improve risk coverage for R&D interruptions and intellectual property rights.

PICC Property and Casualty has launched an "R&D interruption insurance," covering the risk of lithography machine failures in chip manufacturing, with a maximum insured amount of 1 billion yuan per project. Cases of technological integration have emerged simultaneously: Huawei has cooperated with SPD Bank to launch "AI supply chain finance," increasing the efficiency of loan approval by 80%; Ant Chain has launched a cross-border trade blockchain platform, shortening the settlement cycle to 3 hours. Driven by policies, the "two-way empowerment" ecology of technology and finance is taking shape at an accelerated pace.

Policy Effectiveness Needs to Be Verified by "Market Resonance"

This policy combination takes into account both short-term stabilization of expectations and long-term structural adjustment, but its effect still depends on the observation of capital flow and the response of market entities.