Adopted at the 28th Meeting of the Standing Committee of the
Ninth National People's Congress on June 29, 2002
Chapter I General Provisions
Article 1 This Law is enacted for the purpose of improving the
business environment for small and medium-sized enterprises,
promoting their sound development, creating more job opportunities
in both urban and rural areas, and giving play to the important
role of such enterprises in national economic and social
development.
Article 2 For purposes of this Law, small and medium-sized
enterprises refer to the different forms of enterprises under
different ownerships that are established within the territory of
the People's Republic of China according to law, that help to meet
the social needs and create more job opportunities, that comply
with the industrial policies of the State and that are small and
medium-sized in production and business operation.
The criteria for determining small and medium-sized enterprises
shall be laid down by the department under the State Council in
charge of work in respect of enterprises, on the basis of the
number of employees, volume of sale, total assets, etc. of an
enterprise and in light of the characteristics of different trades
and shall be submitted to the State Council for approval.
Article 3 With regard to small and medium-sized enterprises, the
State applies the principles of active support, strong guidance,
perfect service, lawful standardization an guaranteed rights and
interests, in order to create a favorable environment for their
establishment and development.
Article 4 The State Council shall be responsible for formulating
policies regarding small and medium-sized enterprises and make
overall planning for their development.
The department under the State Council in charge of work in
respect of enterprises shall arrange for the implementation of the
State policies and plans concerning the small and medium-sized
enterprises, making all-round coordination and providing guidance
and services in the work regarding such enterprises throughout the
country.
The related departments under the State Council shall, according
to the policies and overall planning of the State for small and
medium-sized enterprises and within the scope of their respective
functions and responsibilities, provide guidance and services to
such enterprises.
Local people's governments at or above the county level, the
administrative departments under them in charge of work in respect
of enterprises and other departments concerned shall, within the
scope of their respective functions and responsibilities, provide
guidance and services to small and medium-sized enterprises located
within their respective administrative areas.
Article 5 The department under the State Council in charge of
work in respect of enterprises shall, according to the industrial
policies of the State and in light of the characteristics of the
small and medium-sized enterprises and the conditions of their
development, determine the key ones for support by formulating a
catalogue of small and medium-sized enterprises to be provided with
guidance for their industrial development or by other means, in
order to encourage the development of all such enterprises.
Article 6 The State protects the lawful investments made by
small and medium-sized enterprises and their investors, as well as
the legitimate profits earned from the investments. No unit or
individual may infringe upon the property and lawful rights and
interests of such enterprises.
No unit may, in violation of laws and regulations, charge fees
to or impose fines on small and medium-sized enterprises, nor
collect money or things of value from them. The enterprises shall
have the right to refuse to make the payment and the right to
report and accuse violations of the provisions mentioned above.
Article 7 Administrative departments shall safeguard the lawful
rights and interests of small and medium-sized enterprises, protect
their right to participate in fair competition and transaction
according to law, and they may not discriminate against the
enterprises or add unequal conditions to their transactions.
Article 8 small and medium-sized enterprises shall observe State
laws and regulations governing occupational safety, occupational
health, social security, resources, environment protection, product
quality, public finance, taxation, finance, etc., and manage
business according to law, and they may not infringe upon the
lawful rights and interests of their employees or impair public
interests.
Article 9 small and medium-sized enterprises shall observe
professional ethics, abide by the principle of good faith, work
hard to raise their business level and increase the ability to
develop themselves.
Chapter II Funding
Article 10 In the budget of the Central Government there shall
be a heading for small and medium-sized enterprises, under which to
arrange special funds for supporting the development of such
enterprises.
Local people's governments shall, in light of actual conditions,
provide financial support to small and medium-sized
enterprises.
Article 11 The special funds provided by the State for
supporting the development of small and medium-sized enterprises
shall be used to promote the establishment of a service system for
such enterprises, to carry out work in their support, to supplement
their funds for development and to support their development in
other areas.
Article 12 The State establishes development funds for small and
medium-sized enterprises, which are composed of the following:
（1） the special funds arranged in the budget of the Central
Government for supporting the said enterprises;
（2） profits yielded by the funds;
（3） donation; and
（4） others.
The State encourages donations to the development funds for
small and medium-sized enterprises through taxation policies.
Article 13 The State development funds for small and
medium-sized enterprises shall be used to support the following
fields of endeavor:
（1） instructions on and services for establishment of
enterprises;
（2） establishment of a credit guaranty system for the
enterprises;
（3） technological innovation;
（4） encouragement for their specialization and their cooperation
with large enterprises;
（5） personnel training and information consultancy, etc.
provided by the service institutions for the enterprises;
（6） creation of international market;
（7） cleaner production; and
（8） others.
The administrative measures for establishment and use of the
development funds for small and medium-sized enterprises shall be
formulated separately by the State Council.
Article 14 The People's Bank of China shall give better guidance
in credit policies and help improve the financing environment for
small and medium-sized enterprises.
The People's Bank of China shall give more vigorous support to
small and medium-sized financial institutions and encourage
commercial banks to readjust their credit structure and provide
greater credit support to small and medium-sized enterprises.
Article 15 All financial institutions shall provide financial
support to small and medium-sized enterprises, make efforts to
improve financial service, change their style of service, enhance
their awareness of the importance of service and improve service
quality.
All commercial banks and credit cooperatives shall improve
credit management, expand the areas of services and develop
financial products that are suited to the development of small and
medium-sized enterprises, readjust their credit structure, and
provide the enterprises with such services as loans, balancing of
accounts, financial consultancy and investment management.
State policy-oriented financial institutions shall, within their
business scope, provide financial services to small and
medium-sized enterprises.
Article 16 The State takes measures to broaden the channels of
direct financing for small and medium-sized enterprises and gives
them active guidance in their efforts to create conditions for
direct financing through various ways as permitted by laws and
administrative regulations.
Article 17 The State, through taxation policies, encourages
various kinds of risk investment institutions established according
to law to increase investment in small and medium-sized
enterprises.
Article 18 The State promotes the development of the credit
system for small and medium-sized enterprises by establishing a
collection and assessment system of credit information, in order to
socialize the inquiry about and the exchange and sharing of credit
information concerning such enterprises.
Article 19 People's governments at or above the county level and
related departments shall promote and arrange for the establishment
of a credit guaranty system for small and medium-sized enterprises,
encourage credit guaranty for them and create conditions for their
financing.
The administrative measures for credit guaranty for small and
medium-sized enterprises shall be formulated separately by the
State Council.
Article 20 The State encourages all kinds of guaranty
institutions to provide credit guaranty to small and medium-sized
enterprises.
Article 21 The State encourages small and medium-sized
enterprises to enter into different forms of mutual-help financing
guaranty according to law.
Chapter III Support for Establishment of
Enterprises
Article 22 The government departments concerned shall actively
create conditions to provide necessary and suitable information and
consultancy and, when working out plans for urban and rural
construction, make rational arrangements for the necessary places
and facilities to meet the needs for the development of small and
medium-sized enterprises and support the establishment of such
enterprises.
Where unemployed or disabled establish small and medium-sized
enterprises, the local government shall actively support them,
provide conveniences and better guidance.
The government departments concerned shall take measures to
broaden channels for the small and medium-sized enterprises to
employ graduates of colleges and specialized secondary schools.
Article 23 The State supports and encourages, through relevant
taxation policies, the establishment and development of small and
medium-sized enterprises.
Article 24 With regard to the small and medium-sized enterprises
that are established by unemployed persons or that employ laid-off
workers in the year of their establishment, the number of whom
reaches the percentage fixed by the State, the ones that use new
and high technologies and conform to State policies for supporting
and encouraging the development of such enterprises the ones that
are established in minority ethnic areas and poverty-stricken
areas, and the ones that provide jobs to disabled persons, the
number of whom reaches the percentage fixed by the State, the State
reduces the rate of tax or exempts them from income tax during a
certain period of time, and adopts preferential taxation
policies.
Article 25 Local people's governments shall, in light of actual
conditions, provide persons who establish enterprises with policy
consultancy and information services concerning industrial and
commercial administration, public finance, taxation, financing,
labor, employment, social security, etc.
Article 26 Government departments in charge of enterprise
registration shall, in compliance with the statutory requirements
and procedures, handle registration for the small and medium-sized
enterprises established, increase their work efficiency and provide
conveniences to the registrants. They may not impose preconditions
for registration of enterprises beyond the provisions of laws and
administrative regulations; and they may not collect fees beyond
the ones or rates specified by laws and administrative
regulations.
Article 27 The State encourages small and medium-sized
enterprises, in accordance with the State policies for the use of
foreign funds, to introduce foreign investment and advanced
technology and management expertise and to establish
Chinese-foreign equity joint ventures and contractual joint
ventures.
Article 28 The State encourages individuals and legal persons,
in accordance with law, to take part in the establishment of small
and medium-sized enterprises by investing their industrial property
right, nonpatented technology, etc.
Chapter IV Technological Innovation
Article 29 The State formulates policies to encourage small and
medium-sized enterprises to develop new products and to adopt
advanced technology, manufacturing technique and equipment to meet
market needs and to improve product quality and make technological
progress.
When launching projects for technological innovation and
projects for technological updating in support of the products of
large enterprises, small and medium-sized enterprises may enjoy the
policy of discount interest on loans.
Article 30 The government departments concerned shall give
policy-related support to small and medium-sized enterprises in
terms of planning, land use and finance, promote the establishment
of different kinds of technical service institutions and establish
centers for advancing the productive forces and bases for creating
science- and technology-oriented enterprises, in order to provide
small and medium-sized enterprises with services relating to
technological information, consultancy and transferring and
services for the development of products and technologies, and to
help promote the transformation of scientific and technological
achievements and upgrade the technology and product of the
enterprises.
Article 31 The State encourages technological cooperation,
development and exchange between small and medium-sized enterprises
on the one hand and research institutions and institutions of
higher education on the other, in order to promote the
industrialization of scientific and technological achievements and
actively develop small and medium-sized enterprises that make use
of scientific and technological achievements.
Chapter V Market Development
Article 32 The State encourages and supports large enterprises
to establish, on the basis of resources allocation by the market,
stable relations of cooperation with small and medium-sized
enterprise in respect of the supply of raw and semi-processed
materials, production, marketing, and technological development and
updating, in order to help promote the development of small and
medium-sized enterprises.
Article 33 The State gives guidance to, promotes and regulates
the restructuring of the assets of small and medium-sized
enterprises through merge, purchase, etc., in order to optimize the
allocation of resources.
Article 34 When purchasing goods or service, the government
shall give first priority to small and medium-sized
enterprises.
Article 35 The government departments and institutions concerned
shall provide guidance and assistance to small and medium-sized
enterprises to stimulate the export of their products and promote
their economic and technological cooperation and exchange with
other countries.
The policy-oriented financial institutions of the State
concerned shall, by means of providing loans for import and export,
export credit insurance, etc., support small and medium-sized
enterprises in their efforts to develop market abroad.
Article 36 The State formulates policies to encourage qualified
small and medium-sized enterprises to invest abroad, participate in
international trade and develop international market.
Article 37 The State encourages the service institutions for
small and medium-sized enterprises to hold exhibitions and fairs
for their products and to conduct information consultancy
activities.
Chapter VI Public Services
Article 38 The State encourages all sectors of the society to
establish and improve the service system for small and medium-sized
enterprises and to provide them with services.
Article 39 The government shall, in light of actual needs,
support the institutions established in the service of small and
medium-sized enterprises and see that they provide top-notch
services to the enterprises.
The service institutions for small and medium-sized enterprises
shall make full use of computer networks and other advanced
technologies to gradually establish and improve the information
service system opening to the entire community.
The service institutions for small and medium-sized enterprises
shall contact the various kinds of public intermediary agencies and
encourage them to serve such enterprises.
Article 40 The State encourages the various kinds of public
intermediary agencies to provide the small and medium-sized
enterprises with such services as instructions on establishment of
enterprises, business consulting, information consultancy,
marketing, investment, financing, credit guaranty, property right
transaction, technological support, bringing in of talents,
personnel training, cooperation with other countries, exhibitions,
fairs and legal advice.
Article 41 The State encourages related institutions and
institutions of higher education to train managerial, technical and
other personnel for small and medium-sized enterprises, in order to
help raise the enterprises' level of marketing, management and
technology.
Article 42 The self-regulating trade organizations shall
actively serve the small and medium-sized enterprises.
Article 43 The self-regulating organizations in charge of the
self-restricting and self serving small and medium-sized
enterprises shall safeguard the legitimate rights and interests of
the enterprises, express their suggestions and requirements, and
serve them in market development and increase of their management
ability.
Chapter VII Supplementary Provisions
Article 44 The provinces, autonomous regions and municipalities
directly under the Central Government may, in light of the
conditions of the local small and medium-sized enterprises,
formulate measures for implementation of this Law.
Article 45 This Law shall go into effect as of January 1,
2003.
(China.org.cn)