The hottest suggestion is to take urgent measures

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It is suggested to take urgent measures to help green enterprises tide over the difficulties

since the end of last year, many green environmental protection enterprises, under the background of the state's strict control of local PPP project financing, strengthening the supervision of shadow banks, and macro deleveraging, have begun to face difficulties such as a sharp rise in credit risk, a contraction in financing channels, and a sharp rise in financing costs. The cost of financing (such as issuing bonds) of large-scale private environmental protection enterprises has generally increased by more than 3 percentage points, and small and medium-sized green environmental protection enterprises are completely unable to obtain funds, so many enterprises are facing severe challenges such as capital chain breakage, default and bankruptcy. Since April this year, a number of large and medium-sized green enterprises, including Shenwu group, Shengyun environmental protection, St Zhongan, and Kaidi ecology, have defaulted. Oriental Garden issued one billion yuan of bonds, but only sold 50 million yuan

in the first half of this year, the issuance of green bonds in China also decreased by 29% over the same period last year. From the largest and fastest-growing green bond market in the world in 2016, China has become one of the regions with the lowest growth rate in the global green bond market this year. Since the beginning of this year, the average decline of environmental protection stocks has been nearly 35%, which is greater than that of all other industries. The listing financing or refinancing channels have been basically closed. Some environmental protection enterprises believe that "at present, environmental protection enterprises are no longer facing the problem of difficult and expensive financing, but are facing the problem of 'whether they can continue to survive' due to the closure of financing channels". If measures are not taken in time, many environmental protection enterprises may close down, and the scale and output value of the environmental protection industry may shrink significantly, which will have an adverse impact on the implementation of the three national action plans for the prevention and control of air, water and soil pollution

in view of this, the environmental chamber of Commerce of the all China Federation of industry and Commerce and the Special Committee on green finance of the Chinese financial association formed a joint course, such as the livelihood construction problem group in which municipal pipelines are very basic, led by Ma Jun, chairman of the Green Finance Committee, and Luo Jianhua, vice president and chief policy expert of the environmental chamber of Commerce. By organizing relevant enterprise forums, fully listening to the opinions and suggestions of all parties, collecting and sorting out a large number of data and conducting in-depth analysis, the research group prepared a report entitled "suggestions on taking urgent measures to help green enterprises tide over difficulties"

the report analyzes the reasons why many green environmental protection enterprises, especially private environmental protection enterprises, are facing serious difficulties recently, mainly including the following aspects:

first, local governments have adjusted PPP project policies on a large scale, and a large number of environmental protection PPP projects have been stopped, which directly leads to the inability of environmental protection enterprises participating in the projects to continue to obtain financing

second, the new asset management regulations require financial institutions to strictly clean up non-standard businesses to prevent risks, leading to a surge in financing costs for private-owned industries, including environmental protection

third, formal financing channels are also facing greater obstacles. The cycle of bank credit approval has significantly lengthened, and the preconditions for financing environmental protection enterprises have become more stringent

fourth, some financial institutions implement discriminatory treatment on private enterprise financing, which increases the financing difficulty and cost of private environmental protection enterprises

fifth, there are few large enterprises in the green environmental protection industry, and most of them are small and medium-sized enterprises. Their financial strength is generally weak. Once the financial environment is tightened, it is prone to crisis. Some environmental protection enterprises have aggressively seized too many PPP projects and carried out a large number of debt financing through non-standard financial instruments, significantly increasing the debt ratio. Once the government suddenly stops the project or regulates the financing channels of shadow banks, the capital chain will be broken

the report points out that in order to alleviate the financing difficulties of green enterprises as soon as possible, prevent large-scale enterprise defaults, closures and the resulting industrial financial risks, ensure that the price of recycled waste plastics in the field of pollution control is far cheaper than the rising price of plastic raw materials in recent years, and achieve the goal of steady growth by supporting green development, It is suggested that relevant departments should take the following measures to support green enterprises as soon as possible:

first, moderately reduce the tax rate of the environmental protection industry. For operating income from sewage, garbage, hazardous waste, medical waste, sludge treatment, etc., reduce the value-added tax rate, for example, with reference to the 6% tax rate of the living service industry

second, ensure the normal operation of the PPP projects that have started to meet their reasonable financing needs; Environmental protection projects with stable cash flow should be clearly included in the scope of PPP projects that should be supported. The Ministry of finance should guide local governments to accurately implement the policy guidance of controlling local debt, avoid the simplification of "one size fits all" calling for the suspension of PPP projects, and take measures to ensure the continuity of financing for PPP projects that have been signed and started, so as to prevent artificial default risks; Environmental protection projects with stable cash flow should continue to be included in the scope of PPP

third, bring green enterprises into the support scope of targeted RRR reduction and refinancing. In the past, targeted RRR reduction was mainly used to support small and micro enterprises and rural credit. It is suggested that banks with a certain proportion of green credit should also be given priority support in the next targeted RRR reduction, and green enterprise loans should also be included in the scope of RRR reduction support. In addition, we should continue to strengthen measures to support green environmental protection projects through refinancing

IV. encourage banks to hold green bonds in the people's Bank of China's macro Prudential assessment (MPA) system for financial institutions. Encouraging banks holding green bonds can increase the demand for green bonds, which is conducive to the issuance of green bonds

v. clarify the transitional arrangements of the new asset management regulations. On the basis of the new asset management regulations and rules that have been issued and the measures for the supervision and administration of financial management business of commercial banks (Draft for comments), give full consideration to the financing needs of private small, medium and micro enterprises, and make clear and appropriate arrangements for the assets that cannot be returned during the transition period, so as to avoid the steep decline of "non-standard" financing of private and small and medium enterprises due to the overreaction of financial institutions to the regulatory intent

VI. expand the guarantee and discount support for green enterprises. At the executive meeting of the State Council on March 28 this year, it was decided to establish a national financing guarantee fund to promote the alleviation of financing problems such as small and micro enterprises and "agriculture, rural areas and farmers". Specific measures should be introduced as soon as possible to use the fund to support the green environmental protection industry. The central and local governments should also consider providing discount interest support for loans and bond issuance of energy-saving and environmental protection enterprises. In addition, it can be considered that Zhongwang, an industry association in the field of environmental protection, not only provided all aluminum materials to participate in the establishment of guarantee funds/companies to support the environmental protection industry, but also piloted in some places, where local governments and green enterprises jointly funded the establishment of guarantee funds/companies to provide guarantee services for green enterprises

VII. The people's Bank of China and the China Banking and Insurance Regulatory Commission can support through the window and require financial institutions not to adopt discriminatory financing policies against private enterprises

VIII. Encourage commercial banks to carry out green credit by means of accounts receivable pledge, intellectual property pledge, equity pledge, etc. Appropriately expand the scope of loan collateral in the environmental protection industry, and allow mortgage financing of allocated land and above ground buildings, ground and underground pipes, equipment and facilities

IX. actively develop green equity green funds, improve the financing structure of green environmental protection enterprises, and reduce the leverage ratio of the environmental protection industry. The national green development fund being prepared by the Ministry of finance should also speed up the preparation and implementation to meet the urgent equity financing needs of green enterprises

X. support financial innovation such as collective bonds of small and medium-sized enterprises. We will support environmental protection enterprises in issuing debt financing instruments such as aggregate bonds and corporate bonds of small and medium-sized enterprises, and accelerate the issuance of short-term financing bills, medium-term bills, targeted financing instruments, as well as innovative bond financing instruments such as ultra short-term financing bills, project income bills, and sustainable bills

Xi. Capacity building of financial risk management for green environmental protection enterprises. We should strengthen the training of financial risk management of these private enterprises, improve their ability to judge the financial risks caused by excessive debt, and avoid making the same mistakes in the next economic and financial cycle

the report is submitted to the State Council through the people's Bank of China, the all China Federation of industry and Commerce and other channels to provide a broad exchange platform between the government, industry and capital. Vice Premier Liu He gives instructions. The Central Leading Group Office of Finance and economics organizes representatives of the chamber of Commerce for the environment, the Green Finance Commission and relevant green environmental protection enterprises to hold a symposium to study the financing situation and solutions of China's green environmental protection enterprises

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