SME Get Financial Support
发布时间：2021-09-30 14:45:58 来源于：CBF
摘要：
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In August, President Xi Jinping called for efforts to foster the innovative development of micro, small and medium-sized technology companies.
China's latest move to support over 1,000 innovative small and medium-sized companies is conducive to enhancing the resilience of the industrial chain and boosting the high-quality development of the nation's sprawling industrial economy, officials and analysts said.
The comments came after the Ministry of Finance said on February 4th that the central government will allocate more than 10 billion yuan ($1.55 billion) from 2021 to 2025 to support the growth of more than 1,000"little giants", or SMEs that focus on a market niche and master key technologies with strong innovation capacity.
Such SMEs are similar to "hidden champions", a term coined by German author Hermann Simon to describe small, highly specialized world-market leaders in Germany.
Innovative growth
Qu Xianming, an expert at the National Manufacturing Strategy Advisory Committee, a Beijing-based think tank, said innovative SMEs are a key link in the entire industrial chain and their role is irreplaceable.
Cultivating globally competitive "little giants" can help China better stabilize the supply chain and seek high-quality development in manufacturing, he said.
"China lags behind developed countries in making certain high-end industrial components, and the efforts to nurture SMEs that specialize in one or two products can help the country achieve breakthroughs in crucial areas and complement its industrial structure," Qu said.
Shi Zhengwen, a professor of tax law and policy at the China University of Political Science and Law in Beijing, said, "The money can be used to attract provincial governments to increase their fiscal support to innovative, specialized SMEs."
The latest fiscal support is part of China's broader push to cultivate a globally competitive ecosystem of SMEs, which account for nearly 50 percent of the nation's tax revenue, 60 percent of China's GDP, 70 percent of technological innovation and 80 percent of urban employment in China, according to the Ministry of Industry and Information Technology.
In August, President Xi Jinping called for efforts to foster the innovative development of micro, small and medium-sized technology companies during his inspection tour of Anhui province.
In response to the call, Xiao Yaqing, minister of industry and information technology, said earlier this year that the ministry plans to turn 10,000 SMEs into "little giants "over the next three to five years to help them improve their innovation capabilities, boost corporate management and accelerate digital transformation.
Last year, China SME Development Fund Co Ltd, a fund with registered capital of 35.75 billion yuan, was set up in Shanghai to promote the sustainable growth of SMEs in key sectors. The Ministry of Finance acts as a limited partner to the fund with a 42.66 percent stake amounting to 15.25 billion yuan.
Amid the COVID-19 pandemic, the central government has rolled out a set of policies, including tax rebates, to help SMEs resume work and solve financing difficulties.
Cao Yuteng, CEO of FlexBot, a self-driving technology startup in Guiyang, Guizhou province, said he is very excited to see the government's commitment to help SMEs.
"Despite short-term difficulties amid the pandemic, we are working hard to use technologies to improve efficiency. We are confident about future development," Cao said.
About 92 percent of 605 surveyed SMEs in China said they are confident about their ability to innovate despite pressure from intensified competition, market uncertainties and challenges created by COVID-19, according to a report jointly released in July by US tech heavyweight HP Inc and Peking University's Guanghua School of Management.
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New system to improve SME lending
China has established a unified national financing registration system that uses movable property and rights as pledges, which is expected to increase loans for small and medium-sized enterprises and improve the overall business environment.
The unified system has been expanded across the country since Jan 1, after pilot programs were conducted in four cities－Beijing, Shanghai, Chongqing and Guangzhou in Guangdong province－central bank officials said at a news conference.
The People's Bank of China, the central bank, was authorized by the State Council, China's Cabinet, to take full responsibility for the unified registration system. It started providing support and inquiry services on Jan 1, and the nationwide system is running smoothly, said Zhang Zihong, head of the PBOC's Credit Reference Center.
A statement from the PBOC said seven types of pledges of movable property and rights will be subject to the unified registration. These include production equipment, raw materials, semifinished products and finished products, accounts receivable, deposit slips, warehouse receipts and bills of lading, and financial lease pledges.
Based on the type of pledge of movable property and rights, the market entities can apply for registration within a single system.
It will increase the transparency of real rights for pledges, add to the certainty of realizing the rights of secured parties, reduce the risks and costs of credit transactions and support financial institutions and other secured parties to provide pledge financing, experts said.
The State Council decided on Dec 22 to unify the nation's registration system for movable property and rights pledges from Jan 1,2021. The Credit Reference Center of the PBOC was designated to carry out the registration service accordingly.
Analysts said the decision was in line with requirements under the Civil Code and will help improve the business environment in the country.
Providing loans for micro, small and medium-sized enterprises based on their credit information is a measure that the central bank promoted last year, which facilitated production resumption since the novel coronavirus outbreak, said Tian Di, deputy head of the PBOC's Credit Information System Bureau.
By the end of 2020, 131 corporate credit information institutions received approvals from the central bank to provide registration and inquiry services to market entities. The PBOC said that seven key market-oriented institutions helped about 2.35 million small and micro companies receive 1.41 trillion yuan ($216.2 billion) of credit by the end of last year, with a nonperforming loan ratio of 1.16 percent, a relatively low level.
The measures are effective in helping small businesses get financing and mitigate the shocks from the COVID-19 pandemic, said Tian.
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Recovery for SMEs vital for 2021 growth
China's growth prospects for this year will hinge largely on the continuation of policies to boost consumption and the better recovery of small and medium-sized enterprises, experts said.
Chen Changsheng, director-general of the department of macroeconomic research at the Development Research Center of the State Council, said in a recent interview that China could achieve its economic growth targets for last year due to the prompt actions taken to contain the COVID-19 pandemic and its market-friendly policies.
The central government issued several innovative fiscal and monetary policies to help businesses and households since COVID-19.
These include a special transfer mechanism designed to channel incremental fiscal funds straight to county-level governments, and the extension of repayments for inclusive loans and credit support programs to help small businesses.
"These newly developed mechanisms have effectively energized the market players, particularly the small and private firms, and made businesses hum again," Chen said.
He said that despite the COVID-19 epidemic, there was no decline in the number of market participants while the number of new businesses kept growing. There are more than 100 million market entities in the economy, with the majority being SMEs, accounting for over 80 percent of the total jobs in the country.
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China's private business sector is burgeoning largely due to the country's consistent reform efforts, Chen said.
The country made enormous efforts to boost globalization and opening-up last year, including the signing of the Regional Comprehensive Economic Partnership agreement among 15 participating countries, completing negotiations on the EU-China Comprehensive Agreement on Investment, releasing a master plan for the Hainan Free Trade Port and shortening the negative list for foreign investment, and so on.
He said that China's resolute efforts and achievements in effectively containing COVID-19 have ensured a speedy economic recovery, but also contributed substantially to ensuring the stability of global supply chains.
The Central Economic Work Conference in December said China will strive to keep its economic fundamentals within a proper range, and pledged to maintain its policy support for the economy with no major policy shifts.
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