China is unleashing billions of dollars of lending to technology start-ups and other small companies using their intellectual property as collateral as Beijing seeks to revive demand for loans and stimulate a lagging economy.
Total new intellectual property-pledged financing loans soared 57 per cent in the first six months of 2024 compared with the same period last year to Rmb419.9bn ($58.5bn), after increasing 75 per cent to Rmb854bn for the full year in 2023, according to official figures from China’s National Intellectual Property Administration.
The rapid escalation in use of this lending instrument, which in the west is often used by distressed companies without other valuable assets, comes as policymakers try to revive sluggish credit growth in the world’s second-largest economy.