China to tighten regulation of loan guarantee service: State Council

BEIJING, Feb. 9 (Chinese media) -- China will establish a

ministry-level joint meeting on the management and supervision of loan guarantee

services, according to a circular from the general office of the State Council

(cabinet) Monday.

The joint meeting will formulate policies to promote

the development of loan guarantee services, set up a management and supervision

system for such services and direct local governments to undertake supervision

and risk management.

The government ordered local governments to take

measures in line with local conditions to ease financing difficulties for small

and medium-sized enterprises, the circular said.

Many borrowers in China use the services of

guarantors, who charge fees for their participation.

The meeting will make regulations that cover how loan

guarantors are established, how much they can lend and how they will be

supervised. The regulations should be submitted to the State Council for

approval.

The joint meeting is being organized by the China

Banking Regulatory Commission, with the National Development and Reform

Commission, the Ministry of Industry and Information Technology, the Ministry of

Finance, the People's Bank of China (central bank),the State Administration for

Industry and Commerce and the Legislative Affairs Office of the State

Council.