China acts to encourage foreign private enterprises

China is considering raising the foreign debt ceiling for high-tech firms as part of its efforts to enhance financial support for private enterprises, the State Administration of Foreign Exchange (SAFE) has said.
Executives and industry experts said the moves will support private, tech-oriented enterprises to obtain more overseas financing and help private sector exporters save on costs and enhance efficiency, thus sharpening their international competitiveness.
“We will increase the quota for eligible high and new-tech firms, ‘Little Giants’ and tech-oriented small and medium-sized enterprises to autonomously borrow external debt at an appropriate time,” a SAFE official said in an interview with the China Daily website.
High and new-tech enterprises are government-recognized companies that engage in innovation and research and development. ‘Little Giant’ companies refers to specialised and sophisticated SMEs that produce novel and unique goods and services.
SAFE said the moves would be part of the country’s efforts to deepen the reform of foreign exchange management to extend support for the private sector, including efforts related to cross-border investment and financing, foreign exchange rate risk management and foreign exchange policies to facilitate international trade.
“We will optimize and expand facilitation policies, tilting toward private entities with genuine need and good compliance, to better support the stability of foreign trade,” the administration said.
Noting that private sector enterprises are playing an increasingly important role in foreign trade – not only in the growth of trade but also in terms of economic restructuring and innovative development – the administration said it is committed to providing strong financial support for the healthy development of the private economy and “helping private enterprises grow stronger and better”.
SAFE said: “A series of measures will be gradually introduced, including optimizing and upgrading the cross-border cash pool policy for multinationals, simplifying the foreign exchange management of direct investment, expanding the facilitation quota for cross-border financing of innovative and tech enterprises, and optimizing the policy of facilitating foreign exchange receipts and payments under the capital account.”

China’s domestic consumption will offset tariff risks
Despite the ‘reciprocal tariff’ policy announced by the United States, senior economists say that China’s strong domestic consumption potential and its people-centric investment strategies means it is well placed to offset the risks posed by tariff hikes.
“While the Chinese economy faces challenges, the sky is not falling,” said Chen Wenling, former chief economist at the China Center for International Economic Exchanges. “China’s economy is still robust and capable of weathering storms.
“China’s economy has maintained a steady growth trajectory over the past decades, with its massive economic scale serving as a powerful buffer against external pressures.”
Chen said China is doubling down on boosting domestic demand – both consumer spending and effective investment – to prop up its growth, with policymakers setting the country’s deficit-to-GDP ratio at the highest level on record.
By placing domestic demand at the forefront, China can create a more stable and self-sustaining economic growth model that is less vulnerable to the volatility of global trade flows, he added.
China’s annual economic growth rate in 2025 will “be faster than that of last year”, said Li Daokui, director of Tsinghua University’s Academic Center for Chinese Economic Practice and Thinking. “Policymakers still have a diverse range of policy tools at their disposal.”
China has the “sufficient patience and determination” to confront the shocks of the Trump administration, as US polices are hastily implemented, often without a well-thought-out strategy or a clear understanding of their broader implications, Li said.
And Jeffrey Sachs, director of the Centre for Sustainable Development at Columbia University, said: “The US should recognize that China’s rise is not only good for China, but also good for the US and the world as a whole.”
The United States “should not aspire to a world in which it alone is prosperous, while everyone else remains poor. Instead, it should strive for a world in which prosperity is widely shared, and all nations can reap the benefits of peace and openness,” Sachs added.