China's commercial banks told to turn on the lending taps for small businesses

The mainland's banking regulator on Friday urged commercial banks to boost lending to small businesses and the rural sector, as Beijing tries to revive its faltering economy and steer it towards more sustainable growth driven by domestic consumption and new technology.

The comments by China Banking Regulatory Commission vice-chairman Zhou Mubing coincided with the release of weaker-than-expected trade data.

Imports fell 16.2 per cent year on year in April while exports were down 6.4 per cent, compounding a 15 per cent decline in March.

To cut the economy's reliance on trade and to encourage consumption, the central government promised to increase funding to rural and small businesses.

"Commercial banks must harness the government's policy support to further improve financial services to micro and small businesses," Zhou said.

The central bank also said it issued 65 billion yuan (HK$82 billion) worth of three-month loans to policy and commercial banks last month to bolster liquidity.

That left China with 1.08 trillion yuan worth of three-month loans at the end of April, the central bank said in an online statement.