China launched a roadmap to prop up SMEs

A roadmap program for the growth of tech-oriented small and medium sized enterprises (SME) has jointly launched by Innovation Fund for Small Technology Based Firms under Ministry of Science and Technology, China Development Bank, Shenzhen Stock Exchage, Business Start-up Committee of China Hi-tech Zones Assiociation, and Venture Capital Committee of China Sci-tech and Finance Promotion Council. The purpose of the roadmap is to prop up the growth of the SMEs by integrating social resources.

99.3 percent of Chinese enterprises above the scale are SMEs. They generate more than 50 percent of the national sales, more than 70 percent added industrial production value, more than 40 percent tax revenue, more than 60 percent exports and more than 75 percent of job opportunities. About 65 percent of patents and 80 percent plus technical innovation are made by SMEs.

Since China entered into a time of heavy chemical industry, elasticity of employment caused by GDP growth has been weakened. This, plus the transfer of surplus rural labor, the urbanization process and enlarged college enrollment, has put the country's employment under mounting pressure.

Experience of developed countries shows that a business launched by one person creates 8 to 10 jobs. US policies to spur the development of SMEs in 1960s' have sowed seeds for its economic boom in 90s'.

Chinese Ministry of Sci-tech and Ministry of Finance set up Innovation Fund for Small Technology Based Firms in 1999 which has extended financial aid to more than 4000 projects since then. The 3.3 billion yuan input of the central government has brought about capital injection from local government and financial institutions 16 times as much as that amount. Enterprises receiving the fund experienced significant growth in their sales revenue, tax payment and job opportunities.

Though the fund has worked well so far, there is still much room for more possibilities. The cooperation of the five organizations is the first step to encourage business start-up. Not only hi-tech businesses, but also those for survival, will benefit from the policy.

By People's Daily Online