China Supports High-quality Enterprises in Different Forms of Ownership in Taking out Loans from Abroad

On March 14, 2024, the National Development and Reform Commission (NDRC) released the Circular on Supporting High-quality Enterprises in Taking out Medium and Long-term loans from Abroad to Boost the High-quality Development of the Real Economy (Exposure Draft) (the “Circular”), which is open for public comments until April 13, 2024.

The draft Circular first specifies the conditions that an enterprise shall meet before being recognized as a high-quality one. Second, it eases foreign debt approval requirements and procedures, implementing special reviews on high-quality enterprises’ applications for the registration of foreign debts. For international commercial loans for which the borrower is temporarily unable to provide the signed loan agreement, or for the overseas issuance of bonds for which the issuer is temporarily unable to determine the lead underwriter, it is allowed to handle the registration through self-commitment. Third, it keeps policy measures flexible and appropriate, supporting high-quality enterprises in various forms of ownership in taking out loans from abroad and vowing to adjust the conditions for the identification of high-quality enterprises in due course. Fourth, it improves ongoing and ex-post oversight to protect enterprises from foreign debt-related risks.