China creates US$2.4b fund to help small firms
By Richard Fu |
February 2, 2012, Thursday
|
Print Edition
Print Edition
CHINA yesterday announced new measures, including a 15 billion yuan (US$2.4 billion) fund, to aid cash-strapped private small businesses as economic growth moderates.
The government will also extend preferential income tax policies for small enterprises until 2015 and encourage banks to issue special bonds to raise funds to lend to these companies, according to a statement released after a State Council meeting presided by Premier Wen Jiabao yesterday.
The State Council, China's Cabinet, said small companies have "significant strategic importance" to helping China keep stable and rapid growth amid a global financial meltdown.
The micro and small-sized business is the main channel of creating new jobs, the platform for entrepreneurs to grow and the major force for scientific innovation, it said, adding that the sector is facing rising costs and difficulties in funding.
The fund will support the "start-up of micro and small enterprises," it said.
These companies have for decades been lobbying for easier access to credit, especially when China tightened its monetary policies last year to tame inflation while the weak economy in Europe and the US affected the business of many small Chinese manufacturers, which rely on exports to survive.
The Cabinet yesterday said it now requires banks to ensure loan growth to small companies should not be slower than overall expansion in lending. Banks should also be more tolerant of bad loans to small business. It said China will continue to impose a lower reserve requirement ratio for small banks that lend to small companies.
The government will make it easier for domestic private and foreign investors to invest in small-scale credit companies that serve small enterprises and rural companies. It will also encourage small firms to list on the stock market.
The government will also extend preferential income tax policies for small enterprises until 2015 and encourage banks to issue special bonds to raise funds to lend to these companies, according to a statement released after a State Council meeting presided by Premier Wen Jiabao yesterday.
The State Council, China's Cabinet, said small companies have "significant strategic importance" to helping China keep stable and rapid growth amid a global financial meltdown.
The micro and small-sized business is the main channel of creating new jobs, the platform for entrepreneurs to grow and the major force for scientific innovation, it said, adding that the sector is facing rising costs and difficulties in funding.
The fund will support the "start-up of micro and small enterprises," it said.
These companies have for decades been lobbying for easier access to credit, especially when China tightened its monetary policies last year to tame inflation while the weak economy in Europe and the US affected the business of many small Chinese manufacturers, which rely on exports to survive.
The Cabinet yesterday said it now requires banks to ensure loan growth to small companies should not be slower than overall expansion in lending. Banks should also be more tolerant of bad loans to small business. It said China will continue to impose a lower reserve requirement ratio for small banks that lend to small companies.
The government will make it easier for domestic private and foreign investors to invest in small-scale credit companies that serve small enterprises and rural companies. It will also encourage small firms to list on the stock market.
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