THE government’s decision to approve three new private banks marked its latest efforts to create impetus through deepening reform amid an economic slowdown.

    The country’s banking regulator said Friday that it has given the green light for the establishment of three banks wholly funded by private firms, including Webank by Internet giant Tencent.

    All three banks will mainly target small companies, according to their founders.

    The breakthrough in China’s financial reform came at a time when the country’s growth has slowed from the double-digit pace in the past few decades, and various structural problems including insufficient funding to small firms has hindered growth.

    Growth picked up slightly to 7.5 percent year on year in the second quarter from the 7.4 percent pace in the first. But the upturn is not yet on a solid footing and momentum has to be consolidated.

    To maintain medium to high speed growth, Chinese leaders have said on various occasions that the country will seek impetus through three ways — deepening reforms, adjusting economic structure and improving people’s lives.

    Setting up private banks is a major move in that direction as finance is regarded as the lifeblood of the economy, making it an important aspect in deepening comprehensive reform.

    Small firms, which have lost in the race for loans against much stronger State-owned companies, and paid higher rates than their State peers, will embrace more opportunities with the introduction of the new private banks.

    Skeptics may argue that what the three banks can do is limited given the large size of the Chinese economy and the great number of small firms. But it is important to note that the newcomers will create a catfish effect in the sector with increased competition. The banking regulator has also made it clear that the pilot program will expand.(Xinhua)