Archive for ‘national bureau of statistics’

08/04/2019

China pledges to remove ‘unreasonable barriers and restrictions’ to help SMEs amid trade war

  • The mainland government will also seek to create a level playing field for businesses, most of which are privately-owned, in terms of market entry and regulation
  • Small and medium-sized firms are vulnerable to trade disputes and an economic slowdown even though they contribute the majority of growth and employment
China plans to make it easier and cheaper for businesses to access credit through subsidies and certain bank loans, according to a comprehensive policy guidelines jointly released by the Central Committee and the State Council on Sunday. Photo: Alamy
China plans to make it easier and cheaper for businesses to access credit through subsidies and certain bank loans, according to a comprehensive policy guidelines jointly released by the Central Committee and the State Council on Sunday. Photo: Alamy
China will “remove all sorts of unreasonable barriers and restrictions” to help small and medium-sized enterprises which are seen as vital to help employment and economic growth amid the trade war with the United States.
Beijing plans to make it easier and cheaper for businesses to access credit through subsidies and certain bank loans, according to a comprehensive policy guidelines jointly released by the Central Committee of the Communist Party of China and the State Council on Sunday.
The mainland government will also seek to create a level playing field for businesses, most of which are privately-owned, in terms of market entry and regulation.

“Small and medium-sized enterprises is an dynamic power for national economic and social important and is critical for expanding employment, improving people’s livelihood, and to foster innovation,” the guidelines said. “For now, they are facing problems of rising production costs, difficulty in obtaining credit and insufficient capabilities to innovate – these issues demand high attention.”

China will “remove all sorts of unreasonable barriers and restrictions, trying to ensure fair competition and provide sufficient market in terms of market entry, licensing, bidding and the military-civil infusion,” it added.

While most of the policies are not completely new, the move to pull them together into a larger policy document, which will serve as a guideline for local authorities, shows China’s intention to stabilise the domestic economic situation as its trade disputes with the US continues.

Beijing has also designed a variety of financial policy tools, including targeted required reserve ratio cuts and the use of small and medium-sized enterprise loans as collateral for medium-term lending facilities granted by the central bank, meaning banks will have more incentives to offer financing.

To further boost lending, it will also offer some exemptions for interest received from value added tax, while also providing tax breaks for small firms and start-ups, a lower social security contribution ratio and an increase in government procurement, according to the guidelines.

Small and medium-sized enterprises is an dynamic power for national economic and social important and is critical for expanding employment, improving people’s livelihood, and to foster innovation.New guidelines

The need for the Chinese government to support small businesses became even more obvious last summer when it began its trade was with the US. Small private businesses are more vulnerable to trade disputes and an economic slowdown than state-owned enterprises, which are often bigger and enjoy favourable treatments from the government and banks, even though they contribute the majority of growth and employment.
Employment is the top priority on the agenda of Premier Li Keqiang this year, as shown in his government work report revealed last month. China has vowed to create 11 million new urban jobs this year and cap the surveyed urban unemployment rate at 5.5 per cent.
Morgan Stanley economists noted that China’s real gross domestic product growth may slow to 6.2 per cent in the first quarter.
“The main drag is slower investment growth, led by property construction and manufacturing [capital expenditure] amid still-subdued export and business sentiment,” Morgan Stanley economists Robin Xing, Jenny Zheng and Zhipeng Cai said.
The National Bureau of Statistics is due to release the first quarter economic data on April 17.
Source: SCMP
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