Chinese medium and small enterprises (SMEs) will see more favorable policies this year. The Economic Information Daily learnt that the Ministry of Industry and Information Technology (MIIT) and relevant authorities are conducting inspections on the financing and development difficulties of SMEs. They will introduce policies encouraging SMEs to participate in Belt and Road initiatives and will explore new ways to help small and micro enterprises finance with low cost. On the other hand, the revised version of the law on promoting the development of SMEs to support the development of SMEs will be released within the year.
Various policies supporting the development of SMEs have been introduced this year. For example, the maximum income for small and micro enterprises to pay taxes has been raised from the current 300,000 yuan to 500,000 yuan. It also launched special campaigns on the receivables and financing of small and micro enterprises, actively promoted the pilot on platforms for entrepreneurship and innovation in the manufacturing industry and the establishment of demonstration bases for entrepreneurship and innovation by small and micro enterprises.
It is learnt that besides the implementation of policies introduced, the MIIT and other relevant authorities have conducted inspections on the current development of SMEs. They will prepare relevant measures on promoting SMEs to participate in Belt and Road initiatives and facilitating financing and such policies are expected to be released in the second half.
As for the financing difficulties of SMEs in overseas markets, some local authorities are exploring the establishment of industrial funds based on their own conditions. They have established industrial funds with the participation of individuals, enterprises, governments and private enterprises to help SMEs go out.
Relevant experiences are expected to be promoted in a wider range in the future.
Industrial experts pointed out that under the framework of the Belt and Road initiatives, SMEs enjoy huge market potentials. For example, SMEs are facing market opportunities in the tourism, catering and other supporting services for large programs.
MIIT officials told the Economic Information Daily that due to the incomplete financial market and the social credit system, small and micro enterprises did not benefit much from policies. Besides, banks generally require mortgages with land and plants for issuing loans, which are lacked by small and micro enterprises. Meanwhile, small and micro enterprises own huge receivables, inventories, equipment and other current assets, which are not fully used. As a result, it is urgent to explore how to support small and micro enterprises effectively utilizing such resources in financing.
Besides, the 12th session of the Standing Committee of the National People’s Congress deliberated the revised version of the law on promoting the development of SMEs in June. It proposed preferential taxation policies and other measures to further reduce the burdens of SMEs and promote their healthy development. Insiders believe that the law will be released within the year.
Li Bo, a senior partner of King & Capital Law Firm, has been concerned about the legislation on SMEs. Li told the Economic Information Daily that the law on promoting the development of SMEs solved the problems of different policies from various authorities from the top design. “The change is that the number of responsible authorities has been reduced to one and it solved the problem fundamentally.”
In addition, it set specific criteria on small and micro enterprises. “Previously, different documents have different criteria on the division of medium, small and micro enterprises, which often resulted in legal obstacles.”
The revised law added four preferential policies, including the reducing and waiver of enterprise income tax and value-added tax for qualified small and micro 4enterprises and the streamlining of tax collection procedures, indicated Sun Baoshu, deputy head of the NPC Law Committee. Besides, it also added provisions on the promotion of financing and the establishment of SMEs.
Currently, SMEs are playing important roles in promoting market competition, creating employment, facilitating technical innovation and promoting the economic growth and social stability. China has over 8 million SMEs, accounting for over 99 percent of all enterprises in China. Their industrial value, taxes and exports account for about 60 percent, 40 percent and 60 percent and provide 75 percent urban working positions.
It is believed that the operation environment of SMEs has to be improved. It is urgent to solve the financing difficulties and different regulation criteria.
Li also pointed out the SMEs face huge pressure on development. The rising cost and reducing profit should be paid more attention.
Based on MIIT’s latest statistics, driven by supporting policies, the development of SMEs has been improving since the beginning of the year. The value added of SMEs with annual revenues exceeding 20 million yuan increased 7.6 percent year on year in the first half, 0.7 percentage points higher than the overall industrial growth.
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