June 27, 2019 / 12:57 AM / 7 months ago

China's funding for small firms still not improved: auditor

FILE PHOTO: People walk on a bridge near the financial district of Pudong in Shanghai, China May 4, 2019. Picture taken May 4, 2019. REUTERS/Stringer

SHANGHAI (Reuters) - China has still not “fundamentally improved” the financing environment for small firms despite a lending push by the central government, the head of the country’s auditing authority told parliament late on Wednesday.

China has been trying to make it easier for small firms to get access to bank loans in a bid to rejuvenate its slowing economy and weather a trade war with the United States.

The country’s cabinet, the State Council, unveiled new measures on Wednesday to cut financing costs for smaller firms.

However, Hu Zejun, head of China’s National Audit Office, said in an annual budget review submitted to the National People’s Congress and published late on Wednesday that the push has yet to have a substantial impact.

“Due to risk prevention, there are still some problems for bank financing, such as a relative high threshold (to obtain loans), lengthy procedures, and a long waiting period,” he said.

He said three of the big five Chinese commercial lenders had also illegally charged 230 million yuan ($33.44 million) in financing fees, “failing to ease the corporate burden” on firms.

The audit office also uncovered dozens of violations in the disbursement of retirement funds and unemployment insurance, with several officials accused of “misappropriating” millions of yuan of state money.

As well, the audit revealed an imbalance between resource development and ecological restoration, Hu said, noting that 3,248 firms in four provinces were found to have illegally extracted 594 million cubic metres of water last year.

(Corrects to fix number of firms in final paragraph to 3,248, not 3,2487)

Reporting by David Stanway in SHANGHAI and Cheng Leng in BEIJING; Editing by Shri Navaratnam

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