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Govt mulls long-term boost for SMEs

bjreview.com.cn | Updated: 2013-08-12 10:40

Govt mulls long-term boost for SMEs

A woman pays for goods at a shop in Fuzhou, Fujian province. The provincial government grants 10 million yuan ($1.63 million) in subsidies to 500 convenience stores across the province.[Photo/bjreview.com]

At a time when economic growth is sluggish, the Chinese government has strengthened support for small and micro-sized enterprises. The State Council announced that value-added and turnover taxes for small businesses with monthly sales of less than 20,000 yuan ($3,262) would be suspended as of Aug 1.

The National Development and Reform Commission (NDRC) issued a statement on its website on July 26 saying that financing services for small and micro-sized enterprises would be strengthened. On the same day, the People's Bank of China (PBC), the country's central bank, announced that it would push the country's banks to increase credit to small and micro-sized enterprises. Traditionally, these enterprises have faced difficulties securing loans, which have normally been reserved for large state-run companies.

According to figures from the State Administration for Industry and Commerce, there are 50 million small and micro-sized enterprises in China, of which 6 million will benefit from the tax-free policy, ensuring jobs and incomes for tens of millions of people.

Small and micro-sized enterprises have long been a major source of jobs in China. However, limited by factors such as capital, technology and talent, small and micro-sized enterprises are weak when it comes to modern management and securing financing, all of which hold back their development.

Jia Kang, Director of the Research Institute of Fiscal Science at the Ministry of Finance (MOF), thinks that supporting small and micro-sized enterprises will help encourage the establishment of more businesses and invigorate confidence in small and micro-sized enterprises, which are key in ensuring stable economic growth and expanding employment.

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