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Small and medium-sized businesses get State backing

Updated: Sep 1,2015 9:20 PM

The State Council decided on Sept 1 to set up a national fund worth up to 60 billion yuan ($9.4 billion) to promote the growth of small and medium-sized enterprises (SMEs).

The meeting, presided over by Premier Li Keqiang, also agreed to measures lowering the initial capital requirement for fixed-asset investment projects and set up a classification system for diagnosis as well as passing a draft plan to promote China’s movie industry.

The central government will invest 15 billion yuan in the fund as initial capital, and the rest will be raised from private and State-owned companies, financial institutions and local governments. The fund will mainly be used to “support SMEs in its initial stage as seed investment”, and the fundraising, setup, management and revenue distribution of the fund will all be conducted according to a market-oriented principle. In order to attract more social capital to boost the growth of SMEs, social investors will be prioritized to receive dividends rather than government-backed investors, the meeting agreed.

The meeting also decided to lower the initial capital requirement for fixed-asset investment projects to lower the threshold and encourage economic growth. Initial capital for projects related to the construction of ports, inland navigation and airports will be lowered from 30 to 25 percent. Those related to the construction of railways, highways and urban rail lines will be lowered from the current 25 to 20 percent, and that of a corn deep-processing project will be lowered from 30 to 20 percent. The initial capital for projects being considered significant by the central government, in addition to the construction of urban underground pipeline and sewage network and parking projects, will be open to more flexible terms, the meeting heard. However, projects related to steel, cement, electrolytic aluminum, charcoal and other overcapacity industries will have to stick to the requirement of 30 to 40 percent as the government strives to restructure the economy.

The State Council also decided to set up a classification system for diagnosis which will help to equalize medical resources, balance fundamental medical services and help people live healthier lives. The government will strengthen medical services at community-level and county-level hospitals, promote recognition of test results from different medical institutions and encourage the elderly, children, pregnant women and patients with chronic diseases to sign contracts with doctors, the meeting said.

The meeting passed a draft plan to promote the movie industry of China and will deliver it for further inspection to the Standing Committee of the National People’s Congress.