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The private sector in China, which is mainly composed of SMEs, now contributes more than 50 percent of tax revenues, and over 60 percent to GDP. Government vows to aid private sector, introduces measures for market vitality China will intensify its support for the private sector, including small and medium-sized enterprises, to boost the vitality of market entities and enhance business confidence, it was decided at an executive meeting of the State Council, China's Cabinet, on Monday. The meeting was chaired by Premier Li Keqiang. A set of new measures in support of SMEs was agreed upon. Efforts will be made to foster a fair and convenient business environment. The views of businesses must be heeded when deciding business-related policies, and reasonable transition periods should be arranged. Businesses of all sizes under all types of ownership will be treated as equals in tenders, land use and other areas under the principle of competitive neutrality. Unless otherwise stipulated, all restrictions on minimum registered capital and equity structure of private firms will be removed when the firms in question invest in resources development, transportation and public utilities. Meanwhile, stronger innovation capacity will be supported. Catalogs of recommended products and services will be issued to help high-tech SMEs gain better access to the market. Private firms will also be supported in participating in the research and development of core technologies and the creation of national standards. Deeper cuts in taxes and fees will be introduced, while financing services will be improved. The required reserve ratio cuts targeting inclusive finance will be adjusted. The re-lending policy targeting small firms will be expanded to qualified small and medium-sized banks and internet banking. The listing of private firms and refinancing authorizations will be accelerated. Asset management products and insurance funds will be employed in addressing the risks of equity-backed loans of listed private firms. "Intensified support for the growth of the private sector, especially SMEs, helps enhance the dynamism of economic growth," Li said. He added that, "To boost the private sector and micro and small businesses, it is crucial to create a level playing field, especially in property protection and market access, to help these businesses compete in a law-based, neutral environment." The lawful rights and interests of private entrepreneurs, including their safety and property, will be protected in accordance with the law, it was urged at the meeting. No government department, public institution or State-owned enterprise should defer contractual payments owed to private businesses. Li stressed the importance of keeping policies well coordinated, consistent and creditworthy to provide businesses an enabling environment and anchor market expectations. The private sector in China, which is mainly composed of SMEs, now contributes more than 50 percent of tax revenues, and over 60 percent to GDP.
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