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The central government has announced a series of policies in support of the country's smaller enterprises.

The efforts are meant to boost smaller firms' confidence in contending with larger companies in the course of economic globalization, according to Jiang Qiangui, vice-minister of the State Economic and Trade Commission.

In what appeared to be the country's "first circular on encouraging and enhancing the sound growth of small and medium-sized firms," the commission said special emphasis will be given to smaller enterprises that employ advanced science and technology, offer job opportunities and efficiently utilize resources.

These firms, along with those that are export-oriented and engaged in community service, will be aided in continuously improving their product quality, upgrading technology and multiplying product varieties, Jiang told a news conference over last weekend.

In contrast, the government will take stern measures to shut down those businesses using backward technology, polluting environment, wasting resources and failing to meet work safety standards, she said.

Of the country's total registered enterprises, 99 percent, or more than 8 million, are small and medium-sized firms, which contribute 60 percent of China's total industrial output, 60 percent of its annual export and create 75 percent of jobs in urban areas.

With the emerging of the "buyer's market" and the menacing growth of a few heavyweight enterprises and groups, however, development prospects of the smaller firms -- an indispensable force in driving China's national economy -- have been challenged, according to Jiang.

To help smaller competitors survive, the state has decided to incorporate measures to support smaller firms as a key component of its economic policies, and strive to create a fair competition environment for the small and medium-sized companies, Jiang said.

The new measures simplify the approval procedures for establishment of smaller firms, and stipulate that local governments in the country's western regions give supporting policies in financial, taxation and land use to smaller enterprises to attract foreign investors as well business people from other parts of the country.

Under the new policies, venture capital will reinforce the technological innovation capacity of the enterprises, and to increase the pace of translation of research results into productivity, according to Jiang.

Taxation reduction or exemption will be granted to smaller firms opened by workers laid off from state-owned enterprises, and banks will increase loans to the small and medium-sized companies, she said.

The country will also ease the terms and conditions for smaller firms, especially high-tech firms, to become listed and issue bonds. Measures are also under way to encourage the enterprises to regroup or transform themselves by utilizing foreign capital through co-operation, transfer of property rights and joint investment.

The policies apply to smaller firms of any kind of ownership, including state-owned, collectively-owned, private and shareholding firms, according to Jiang.

Only 14.8 percent of the country's smaller firms are state-owned, the vice-minister said.

(China Daily)