China's Ministry of Finance, the Ministry of Human Resources and Social Security, the People's Bank of China and the National Financial Regulatory Administration issued joint guidance to strengthen the role of the government financing guarantee and re-guarantee system in supporting employment and entrepreneurship, with a focus on labour-intensive micro and small enterprises and key groups seeking startup finance. The package puts the National Financing Guarantee Fund at the centre of policy transmission by linking re-guarantee resource allocation and re-guarantee fee concessions to a newly proposed, quantifiable “employment contribution” indicator for participating guarantee institutions. The employment contribution indicator combines two equally weighted components: year-on-year performance in the number of jobs supported, and jobs supported per unit of business scale relative to the National Financing Guarantee Fund benchmark. The Fund will use the indicator as an important factor when allocating re-guarantee credit lines, and will apply tiered re-guarantee fee discounts linked to the score, capped at 20%. Measures also encourage “government, bank and guarantee” cooperation to develop dedicated services for high-employment and labour-intensive micro and small firms, including exploring products to finance wage payments and rolling out job stabilisation and expansion loans, with proactive service for firms whose headcount has not fallen but are heavily affected by tariffs. Government financing guarantee institutions are directed to progressively reduce or remove collateral and other counter-guarantee requirements for these firms, weaken profit-based assessments, and expand first-loan and first-guarantee coverage. On entrepreneurship, localities are encouraged to support a broader range of graduates in accessing entrepreneurship guarantee loans, and government financing guarantee institutions are asked to provide guarantees for eligible borrowers across ten priority groups and for micro and small enterprises that absorb their employment, with re-guarantee support extended to qualifying entrepreneurship guarantee loan guarantee business. The guidance also calls for lower all-in borrowing costs through potential local guarantee fee reductions or partial fee refunds for compliant borrowers, differentiated re-guarantee fee concessions where bank-guarantee loss sharing applies, faster end-to-end processing via “quick review, quick approval, quick guarantee, quick lending” and more online workflows, and expanded cross-department data sharing and platform upgrades to improve verification and employment-related statistics.

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