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Lenders try to give boost to culture

(China Daily)

08:34, October 19, 2011

BEIJING / HANGZHOU - Commercial lenders in China are taking a look at television stations, publishing houses and other cultural enterprises in the hope of taking advantage of opportunities that are likely to come from those industries, which the central government has vowed to support.

From the beginning of 2009 to the end of August, the value of the Bank of China's outstanding loans to cultural industries increased by 55 percent, going up to 25 billion yuan ($3.9 billion), said Yang Wei, senior manager of the bank's corporate banking unit.

"Cultural credit is a brand new area for banks and combines both opportunities and difficulties," Yang said. "We highly value the business opportunities lying ahead for cultural industries."

The bank also joined the Ministry of Finance to start the first State-level investment fund for the cultural industry in July. The fund contains 20 billion yuan.

Bank of Beijing, meanwhile, has lent more than 27 billion yuan to cultural institutions since 2007. In the past three years, the value of those loans has increased by more than 300 percent, said Liu Hong, a spokeswoman at the company.

To make such lending easier, commercial lenders also have adopted a flexible collateral policy for cultural industries. For example, some allow companies to obtain loans by putting up copyrights or money owed by their clients as collateral.

The cultural industry was cited by the Central Economic Work Conference of the Chinese government at the end of this past year as an industry that should be developed during the period of the 12th Five-Year Plan (2011-2015). It was also the theme of the latest plenary meeting of the Communist Party of China Central Committee, which concluded on Tuesday.

According to figures from the central bank, 27.6 billion yuan in new loans were made to cultural industries in 2010, which was up by 61.6 percent from the previous year, marking the fastest increase seen for such lending in the country's history.

"Financial support from banks is definitely important to cultural companies like us," said Xu Wencai, vice-president of the Zhejiang-based film and TV giant Hengdian Group Holdings.

"If a cultural company only wants to maintain its operations, of course there will not be huge demands for external capital. But once it decides to develop quicker, its demands for financing will increase."

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