China's banking and insurance regulator said on Friday that it will guide more bank lending and insurance capital into key industries including the manufacturing sector, emerging and strategically important sectors as well as smaller and private businesses to support economic growth next year.

Bank lending to small and micro companies will increase by at least 2 trillion yuan ($285 billion) next year, according to the regulator. It also vowed to further lower financing costs for small and micro companies by 0.5 percentage point next year.

Meanwhile, the regulator will continue to push for market-based debt-for-equity swaps to support companies with financial difficulties and it will work to resolve credit risks in the country's smaller banks to improve their lending capability and asset quality, Yang Liping, chief inspection officer at the China Banking and Insurance Regulatory Commission, said at a news briefing in Beijing.

The value of new yuan loans stood at 15.68 trillion yuan from January to November, up by 9.6 percent from the same period last year. The average interest rate for small and micro firms stood at 6.76 percent from January to October, 0.64 percentage point lower from the level of 2018, according to the regulator.

As of the end of October, the outstanding value of loans to small and micro companies stood at 11.32 trillion yuan, up by 20.9 percent from the beginning of this year.

Liu Zhiqing, deputy head of the statistics and information department of the CBIRC, said that the regulator has stepped up efforts to encourage good quality companies in the manufacturing and infrastructure sectors to participate in the debt-for-equity swap programs to help them reduce debt levels.

The regulator will also encourage more financial firms to participate in such programs to reduce corporate debt leverage. So far financial firms have invested about 425.1 billion yuan in 363 debt-for-equity swap projects, according to Liu.

Yang said that the regulator will strengthen inspection and regulation of smaller banks, encourage them to replenish capital through various channels and order them to accelerate the disposal of nonperforming assets so as to resolve risks and improve their lending capability.

Meanwhile, the regulator is mulling expanding the investment scope of insurance companies and allowing them to invest in more industries to provide long-term capital to the economy, said Yuan Xucheng, director of the insurance fund department at the CBIRC.

As of November, insurers have provided total financing of 15.55 trillion yuan to the economy through ways including equity and bond investment and direct loans, according to Yuan.