Sources: Chinese regulators have told banks to back tech companies, but lenders still prefer stable cash flows and profitability over loss-making tech startups (Bloomberg)
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- Chinese regulators instructed banks to extend credit to tech companies, a strategy the source identifies as a departure from Beijing's traditional reliance on subsidies and state funding.
- Banks are instead prioritizing stable cash flows and profitability, turning away loss-making tech startups despite the regulatory push.
Why it matters: The gap between Beijing's directive and banks' lending behavior means regulatory pressure alone won't redirect capital toward China's loss-making tech sector, leaving those startups reliant on the very subsidies and state funding Beijing is trying to move away from.
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