- Legal guarantees for equal financing rights
- Diversified bond and equity instruments
- Standardized regional equity markets
Introduction: A New Financing Cycle Under the Rule of Law
Since the Private Economy Promotion Law took effect on May 20, 2025, China's private enterprises have entered an era of institutional financing reform. For the first time, the law enshrines equal status in investment, financing, and factor acquisition, laying a fundamental basis to tackle long-standing financing difficulties. By 2026, policy dividends continue to materialize, and capital market reforms are deepening—shifting private enterprise financing from policy-driven support to institutionalized norms. This article draws on public policies and market knowledge to outline key trends.
Bond Financing: Innovative Instruments Broaden Direct Access
While indirect financing still dominates, the bond market is emerging as a vital channel for direct financing. In 2026, the National Association of Financial Market Institutional Investors (NAFMII) continues to expand its support tools for private enterprise bonds, facilitating issuance of science-and-technology innovation notes, green bonds, and carbon-neutral bonds. These instruments lower issuance thresholds and use credit risk mitigation warrants to enhance market acceptance. For example, several specialized "little giant" firms successfully issued high-growth bonds to fund R&D and capacity expansion, reflecting precise capital market support for hard-tech enterprises. Exchange-listed corporate bond reviews have also been streamlined, reducing registration cycles and enabling more mid-sized private firms to access long-term capital.
Equity Financing: Multi-Tiered Markets Meet Diverse Needs
In equity markets, the deepened registration-based IPO reform has clarified the positioning of main board, STAR Market, ChiNext, and BSE, allowing private enterprises to choose venues based on scale and technology intensity. The Beijing Stock Exchange (BSE), dedicated to innovative SMEs, has seen a significant proportion of new listings from private firms recently, many being national-level "little giant" enterprises. The National Equities Exchange and Quotations (NEEQ) reform and smooth transfer mechanisms provide a clear growth path for unlisted firms: listing on the NEEQ, incubation, and eventual transfer to higher-tier boards. Notably, regional equity exchanges (the "fourth board") accelerated standardization in 2026 under CSRC regulations, integrating with the NEEQ and private equity to offer registration, custody, and transfer services for early-stage enterprises, filling a gap in early-stage equity financing.
Credit and Policy Tools: Targeted Easing for Precision Support
Bank credit remains the bedrock of private enterprise financing. Under the People's Bank of China's structural monetary policy, commercial banks' loan growth to private enterprises continues to outpace overall loan averages in 2026. Inclusive small and micro loan support tools have been extended to cover micro and small enterprises with single-entity credit up to RMB 20 million, prioritizing first-time borrowers and credit loans. Banks are also required to improve internal performance assessments, raise tolerance for non-performing loans to private enterprises, and institutionalize a culture of "daring to lend, willing to lend, and able to lend." Government-backed financing guarantee systems are further decentralized, with the National Financing Guarantee Fund cooperating with provincial re-guarantee bodies to cap guarantee fees for private enterprises at below 1%, effectively reducing overall financing costs.
Conclusion: Law-Based Guarantees, Continuous Improvement in Financing Ecology
Looking ahead, as detailed implementation rules of the Private Economy Promotion Law are gradually issued, financing conditions for private enterprises will become even more equitable and transparent. The share of direct financing is expected to continue rising, with innovative bond and equity instruments expanding. Credit support will become more targeted, and fintech applications will further enhance efficiency. Private enterprises themselves must strengthen governance and information disclosure to better align with capital market rules. On the track of law-based and market-oriented progress, private enterprise financing is ushering in a new phase of high-quality development.