China Reiterates Financial Support for SMEs

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　　The State Council here in China has detailed¹ a new list of targets to try to support small and micro-sized businesses here in China.

 

　　CRI's Hu Jia with the details.

 

　　China's Cabinet is throwing more support behind small and micro-sized businesses by emphasizing more financing innovation and credit for the cash-thirsty private sector².

 

　　8 detailed targets have been released by the State Council, clarifying the credit growth rate to SMEs can't be under the national average lending rate.

 

　　At the same time, the incremental³ amount shouldn't be below what was lent last year.

 

　　Tan Yaling is head of the China Foreign Exchange Investment Research Institute.

 

　　She says policy makers⁴ have made a point of reiterating⁵ the policies to show the government's resolution in supporting small and micro-sized businesses.

 

　　In truth, she notes all of the 8 policies put forward in the new detailed list have already been issued this year.

 

　　They include the recent scrapping⁶ of the value-added tax for businesses with monthly revenues under 20-thousand yuan, among other moves.

 

　　However, Tan Yaling points out the biggest issue for small companies in China is getting access to credit, as many banks are reluctant to lend to companies which won't provide a large return in interest payments.

 

　　She stresses the coordinations between small financial institutions and SMEs.

 

　　"Financial institutions over the course of their developments have not address the SME financing woes⁷ or just ignore their demands. This time the State Council has specifically cited small financial institutions to tackle the problem faced by SMEs."

 

　　At the same time, private banks, financial leasing companies and consumer financial firms are being encouraged to set up branches in areas where small businesses are concentrated.

 

　　Policymakers have also vowed⁸ that more will be done to prevent unreasonable⁹ charges on small businesses.

 

　　Zuo Xiaolei with China Galaxy¹⁰ Securities.

 

　　"All in all we need to actually do it. I mean, many problems here in China are actually the problems of implementation¹¹. I expect more actual implementations, or a punishment mechanism¹² to be set up if those goals are missed."

 

　　With the economy slowing through the past few quarters, the Chinese government has been gradually shifting its focus toward small businesses expansion in an attempt to try to expand domestic needs and employment.

 

　　Official data shows 99 percent of companies registered in China are small or medium-sized companies.

 

　　They provide 80 percent of all employment in urban areas, and make up 60 percent of China's economic output.

 

　　For CRI, I'm Hu Jia.

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