China Watch Blog has learnt that South China’s Guangdong province has announced a set of new policies to support cash-trapped small firms which play a vital role in creating jobs in the country’s largest provincial-level economy.
The new policies, which were published on the provincial government’s official website on Thursday, came as small- and medium-sized enterprises (SMEs) face mounting pressures caused by cooling export growth, rising costs and financing difficulties.
According to the online statement, the government will set up several development funds to build financing service systems for small companies, offer them support for scientific innovation and help them develop markets.
The province will also offer tax breaks and support some small firms to seek financing by becoming listed on the stock market, said the statement.
The statement also promised incentives for banks offering credit to small firms and urged them to establish an credit evaluation system suitable for small- and medium- sized firms.
Guangdong’s announcement came after the State Council said earlier this week that the government will support small companies with a 15 billion-yuan (US$2.4 billion) fund and preferential tax policies.
Small- and medium-sized enterprises create about 80 percent of the country’s jobs, but they usually have difficulty in securing bank loans, as Chinese banks prefer to lend to larger companies, especially state-owned enterprises.