Small firms get government support

Guangdong has announced policies aimed at supporting cash-strapped small companies which have an important role in creating jobs in China’s biggest provincial-level economy.

Published on the official website of the provincial government, the new policies came as small- and medium-sized companies deal with increasing pressures due to financing difficulties, soaring costs and dampening export growth.

The online statement said the government will create various development funds to develop financing service systems for small firms, help them develop markets and offer them assistance for scientific innovation.

Guangdong will also provide tax breaks and support several small companies to obtain financing by being listed on the stock market.

It also pledged incentives for banks that offer credit to small companies, encouraging them to set up a credit evaluation system appropriate for small- and medium- sized companies.

The announcement came following the State Council’s earlier statement that the provincial government would support small firms with preferential tax policies and a 15 billion-yuan fund.

SMEs create around 80 percent of the jobs in China, but they typically face difficulty in obtaining bank loans, because Chinese banks prefer lending to bigger firms, particularly state-owned businesses.

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