Development fund to aid small, medium firms
The Chinese Government is working to set up a development fund for small and medium enterprises to help them resolve their financing problems, Vice-Premier Zeng Peiyan said.
While encouraging such businesses to list on stock markets overseas, the central government is attempting to help them widen their financing channels, the vice-premier said at a China-US forum on businesses and venture capital, which opened in Beijing Wednesday.
Additional efforts will be made to push for introduction of venture capital, he said.
Although small- and medium-sized enterprises (SMEs) have become an important force propelling the nation's economic growth and job opportunities, they have suffered financing headaches that constitute development bottlenecks.
National Development and Reform Commission statistics indicate 99 per cent of Chinese enterprises are fall into the category, and absorb 75 per cent of the nation's labour forces, while creating more than 55 per cent of the nation's gross domestic product (GDP).
More than 60 per cent of the nation's export volume and around 45 per cent of its tax revenues are created by such businesses, according to the statistics.
However, due to various factors such as policy barriers, banking regulations and unhealthy financial systems, such businesses often find it difficult to raise capital.
According to a research report released by the People's Bank of China last month, most businesses are short of long-term capital support although short-term financing difficulties have been relieved.
In big-and-medium-sized cities, businesses find it easy to seek capital but their counterparts at or below county level still have difficulties, according to the report, which is the result of a survey conducted by the central bank among 850 SMEs across the country.
Tax policies have been exercised to encourage various investment agencies to increase capital, Zeng said.
Special capital has been arranged and an innovation fund for high-tech companies has been set up, he added.
A board was launched at the Shenzhen Stock Exchange last month and has witnessed a rage of initial public offerings (IPO).
Although China is trying to cool its overheating sectors in the economy by controlling the scale of investment, the central government still supports the projects that conform to the nation's industrial policies and the conditions of market access, Zeng said.
He stressed that China is complementary with the United States in its economy and trade partnership must be intensified as long as both parties explore co-operative fields based on the principles of mutual respect and benefit.
US Secretary of Commerce Donald Evans highlighted the government's role in promoting the development of small- and medium-sized enterprises at the opening ceremonies of the forum, saying government should endeavor to create an open, transparent and competitive environment.