SMEs to get $475m in annual support

Small and medium-sized enterprises (SMEs) are unlikely to close on a large scale this year, and they will receive 3 billion yuan annually in central government support for the next five years, said the Ministry of Industry and Information Technology (MIIT) on Tuesday.

Since the first quarter of 2010, SMEs have faced such problems as high production and labor costs and an unfavorable international environment, with export-driven SMEs hurt by the weak global economy.

The State Council has urged that more to be done to support the development of smaller companies. On Feb 1, the council discussed the issue at an executive meeting and announced that the government would further support SMEs by establishing a 15-billion-yuan fund.

Small companies "serve as a significant channel for creating jobs, a major platform for the growth of entrepreneurship and an important force for scientific innovation", according to a statement released on Feb 1 and reported by the Xinhua News Agency after a State Council executive meeting presided over by Premier Wen Jiabao.

"The Ministry of Finance will allocate 3 billion yuan every year over the next five years and the State Council will release policy documents on further development of SMEs in the near future," said Zhu Hongren, spokesman and chief engineer at MIIT.

MIIT noted that exports had cooled, with industries' export shipments increasing just 16.6 percent last year, slower than in previous years. Domestically, demand for vehicles and real estate will remain in a slow-growth mode, and SMEs will face greater challenges than big enterprises, it said.

According to Zhu, starting last year, the government has paid special attention to this issue to support the development and modernization of SMEs. "Labor-intensive SMEs have no core competitive technology and were hit the hardest during the financial crisis," said Zhu.

In addition to financial support, the central government will establish 4,000 public service platforms for SMEs, including 500 national level platforms.