On 7 April 2020, the Central Committee of the Communist Party of China and the General Office of the State Council jointly released the Guiding Opinions on Strengthening the Healthy Development of Small- and Medium-sized Enterprises. The document outlines a list of 23 specific measures that relevant departments, both at the central and local level, shall implement on the short-term to stimulate the growth and development of SMEs in China. Specifically, the measures are grouped under different themes:
- Shaping of a favourable environment for growth: including the strengthening of fair competition and access for SMEs to more industry sectors, licensing and approval, government procurement and tendering, civil-military integration, etc. More services will be offered to SMEs to reduce procedures and time for company registration, cancellation, and project-approval.
- Solving bottlenecks for SME financing: including cutting reserve requirement ratio for inclusive financing, expanding current relending and rediscount policies to include internet-based banks, and creating more financing channels (e.g. credit risk mitigation warrant, debt financing) as well as ad hoc funds for private enterprises mergers, acquisitions and investment. SMEs will also be encouraged to get listed on stock markets and on the “new third board”.
- Optimising preferential tax policies: including further reducing barriers, costs and fees for SMEs to obtain insurance, and eliminating VAT for banks’ revenue originating from interest rates for loans granted to micro and small-medium enterprises. Existing government procurement policies will also be revised, and new ones formulated, to increase the role and participation of SMEs in procurement. It is made explicit that government procurement will be inclined towards outstanding and excellent SMEs.
- Enhancing innovative development: the proportion of SMEs in government-funded R&D programmes will be largely increased by adjusting current task design and allocation. Large, backbone enterprises will be strongly supported and encouraged to share their resources with SMEs. A series of national- and provincial-level high-tech development zones will also be selected to become ad hoc carriers of tech SME development, especially in terms of financing and investment services and talent attraction. Finally, IPR protection will be strengthened for SMEs by fully adopting internet and big data-based tools.