Developing SMEs key to business climate
Print Edition
The development of small and medium-sized enterprises is key to improving Shanghai’s business climate, Rong Zhiqin, deputy director of the Shanghai Commission of Economy and Informatization, said yesterday.
Rong said SMEs play an important role in creating jobs and boosting the economy but constantly face financing difficulties that can stifle development.
So far, the scale of credit loans for SMEs is small and the main financing channels for them are mortgage and financing-security loans, presenting a huge opportunity for the city to improve the credit-loan business climate.
SMEs’ need for financing has grown significantly this year due to the pandemic.
According to a commission survey, 74 percent of SMEs are burdened by employee compensation, 47 percent face higher expenses due to the pandemic and 31 percent have taken financial hits for breaking contracts.
Of 1,680 SMEs surveyed, only 10 percent of those with financial needs received loans.
But the situation will improve as the commission is focusing on solving the financing difficulty for SMEs by delaying capital repayment with interest, promoting credit loans and establishing a financing security system.
Shanghai’s Regulations on Promoting the Development of SMEs, which will provide more legal protection for SMEs, will be rolled out soon.
On April 10, the city began to implement the Shanghai Regulations on Improving Business Climate.
China ranked 31st for business climate measured by the World Bank last year. Shanghai accounts for 55 percent of weighting in that measurement.
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