Abstract This year, the Ministry of Industry and Information Technology has launched the “Special Action for Small and Micro Enterprises,†aiming to support the growth of innovative, entrepreneurial, and labor-intensive businesses. The initiative seeks to address pressing challenges such as recruitment difficulties and financing barriers that small and medium enterprises (SMEs) are currently facing.
This initiative was highlighted by Xu Kemin, deputy director of the SMEs Department at the Ministry, during an interview with the “China Voice†program on the Central People’s Broadcasting Station. He emphasized that one of the most significant issues SMEs encounter is difficulty in securing funding. He explained that small and micro businesses often rely heavily on credit, yet their demand for it far exceeds the available supply. Additionally, these businesses frequently lack collateral, which increases the operational costs for banks and results in higher interest rates compared to those offered to larger companies.
To tackle these problems, the Ministry plans to accelerate the development of a comprehensive SME service system. This includes promoting public service platforms, improving resource sharing, and enhancing financing services. The goal is to increase credit support and expand access to various financing channels through targeted activities.
Zhu Hongren, chief engineer at the Ministry, also addressed the issue during a financial strategy meeting in December 2012. He pointed out that the current financial relief for SMEs remains inadequate, with a significant gap between the supply of funds from large institutions and the actual needs of smaller businesses. He also noted that SMEs themselves must improve their internal capabilities to better meet financing requirements.
Currently, small and micro enterprises make up a large portion of China's business landscape, but they continue to face numerous challenges, including high costs, limited orders, and recruitment difficulties. Despite repeated calls for solutions, financing issues remain hard to resolve in practice.
Zhu suggested several strategies, including institutional innovation, improved incentives for financial investment, and the development of diversified direct financing systems. He also recommended model innovations that would help decentralize risks and enhance the role of guarantee institutions in SME financing.
Bank of China had previously indicated its intention to shift more focus toward small and medium-sized enterprises in 2013. While the exact credit policy was still under review, the bank confirmed that supporting SMEs was a key objective.
Analysts, however, warn that SME lending remains a global challenge. With weaker data and higher risk, expanding this sector could expose banks to greater losses during economic downturns. Despite the controversy, developing SMEs is seen as a long-term strategic move for major state-owned banks.
In the “2012 China Industrial Economic Operation Report,†the Ministry of Industry and Information Technology stressed the importance of creating a better environment for SMEs. It called for relaxing entry barriers for financial institutions, encouraging private capital participation in banking, and expanding access to multiple financing channels to support real economy growth.Flexible Plumbing Hose,flexible plumbing pipe,rubber plumbing hose,flexible tap connector,pex plumbing hose,15mm flexible hose
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