Nine Ministries Issue Cultural Industry Financing Guidance, Covering Printing and Replication

To carry out the State Council notice on issuing the cultural industry revitalization plan and to strengthen financial services for the sector, the People's Bank of China, alongside eight other ministries and commissions — the Publicity Department of the CPC Central Committee, the Ministry of Finance, the Ministry of Culture, the State Administration of Radio, Film and Television, the General Administration of Press and Publication, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission — recently issued the Guiding Opinions on Financial Support for the Revitalization, Development and Prosperity of the Cultural Industry. The document is positioned as a macro-level financial policy guide for financing cultural industry growth in recent years.

Financial Product Innovation: Fueling Cultural Industry Growth

Addressing the sector's real-world constraints — limited tangible assets, a high proportion of intangible assets and inadequate collateral — the Guiding Opinions centers on efficiently connecting financial capital with cultural businesses and advancing the sector's development and prosperity. It calls for mobilizing multi-tier financial market resources such as credit, insurance and securities, building joint efforts across publicity, culture, finance and fiscal departments, and pooling financial and fiscal resources through product innovation, service improvements and multiple channels.

The Guiding Opinions asks financial institutions to tailor credit products to the varied features of cultural enterprises and to increase effective credit supply.

Multi-Tier Capital Markets: Broadening Direct Financing for Cultural Enterprises

The document proposes accelerating development of multi-tier capital markets and scaling up direct financing for cultural enterprises. Measures include encouraging qualified companies to list and raise funds, supporting financing through bonds and bills, piloting asset securitization for cultural industry projects, and attracting risk-preferring investors such as venture capital and private equity funds into emerging cultural formats that are in early stages with promising market prospects.

The cultural industry insurance market is also a focus. Insurers are expected to develop products suited to cultural enterprises, explore credit insurance, strengthen services for cultural exporters and actively offer export credit insurance.

Modern Enterprise Systems: Building the Institutional Base for Financing

The Guiding Opinions states that supporting mechanisms for financial backing of cultural industry development must be established and improved.

These mechanisms cover six areas. First, cultural enterprises should adopt modern enterprise systems and improve corporate governance to create a solid institutional foundation. Second, central and local fiscal authorities may use special funds for cultural industry development, among other channels, to provide loan interest subsidies and premium subsidies to eligible enterprises. Third, a multi-level loan risk sharing and compensation mechanism should be built, along with a stronger legal framework for property rights protection. Fourth, credit policy and industrial policy should be better coordinated, and the Catalogue of Investment Guidance for the Cultural Industry should be formulated and regularly updated. Fifth, a multi-department information communication mechanism and a cultural industry investment and financing service platform should be established. Sixth, supervision and evaluation of policy implementation should be strengthened, with a policy-oriented effect evaluation system explored to ensure policies are carried out.

On financial service innovation, the Guiding Opinions encourages rights pledge arrangements, supply chain financing for upstream and downstream companies, merger and acquisition financing, and industrial chain integration. Enterprises with stable logistics and cash flow may access accounts receivable pledge loans and warehouse receipt pledge loans. Financial leasing loans may be provided to enterprises involved in performance, exhibition, animation and game leasing; publishing content collection, processing, production and storage; publication logistics, printing and replication; and equipment related to radio, film and television program production, transmission and integration, and film projection. An intangible asset evaluation system for cultural enterprises should be set up to support financial institutions in disposing of cultural intangible assets. Companies with trademark rights, copyrights and other rights may use rights pledge loans, gradually expanding the application scope of income rights pledge loans.

On rates and terms, the document calls for improving interest rate pricing and reasonably setting loan maturities and rates. Financial institutions should, under controllable risk and commercial sustainability, adopt flexible differentiated pricing that meets regulatory requirements and reflects different cultural enterprises' circumstances. For cultural projects with specific cycle and risk profiles, lenders may set loan terms based on the project cycle's funding needs and cash flow distribution. For cultural projects or enterprises listed as key national priorities, institutions may appropriately extend loan terms while effectively controlling risk.

On risk accountability, the Guiding Opinions proposes an evaluation system dedicated to financial services for cultural industries, combining credit risk management with cultural industry promotion and creating positive incentives. Based on assigned responsibilities and assessments of overall quality and comprehensive returns, loan projects for small and medium-sized cultural enterprises may lead to accountability or exemption for relevant personnel in line with actual conditions and rules, so that those who perform their duties are exempted and those who neglect them are held accountable.

Cooperation with non-bank financial institutions is another priority. Banking and non-bank financial institutions should work together, using a mix of financial businesses and products to offer package services that combine credit, bonds, trusts, funds and insurance, while linking financing methods across cultural enterprises' stages from start-up to maturity.

In consumer credit, the Guiding Opinions encourages installment payment and other products and broader comprehensive consumer credit for performing arts and entertainment, exhibitions and tourism, art and handicrafts, animation and games, digital products, creative design; publishing products and services such as books, newspapers, periodicals, audio-visual products, electronic publications, online publishing and digital publishing; printing, replication and distribution; and high-definition television, pay radio and television, mobile multimedia radio and television, and film products. It also calls for stronger online banking promotion and higher online payment adoption in software, network and computer services, design services, and leisure and entertainment. The People's Bank of China's payment, clearing and credit reporting systems should play a greater role, the bank card acceptance environment should be improved faster, and card-based consumption should be promoted in culture and entertainment, radio, film and television, press and publication, tourism and advertising, and art trading.

In foreign exchange services, the aim is to facilitate cross-border investment by cultural enterprises, meet reasonable foreign exchange needs in foreign trade, cross-border financing and investment, improve foreign exchange administration efficiency, simplify and optimize related processes, and help cultural enterprises use foreign exchange funds more efficiently and reduce financial costs.

Source: China Packaging Network (pack.cn), original link: http://news.pack.cn/show-362195.html