The State Council executive meeting on Sept 27 decided to strengthen financial and policy support for small and micro-sized enterprises, to further consolidate the foundation for economic development.

Premier Li Keqiang said at the meeting that small and micro-sized enterprises are not only the main force for attracting employment, but also the new force to stimulate innovation, drive investment and promote consumption.

It was the eighth executive meeting centered on the issue of supporting small and micro businesses since 2013.

This topic has been one of the Premier’s concerns. Small and micro businesses, and mass innovation and entrepreneurship platforms have often been the focus during his domestic inspections, and even on diplomatic occasions, he would talk with foreign leaders about how to strengthen the cooperation between foreign and domestic small and micro companies.

The Premier has stressed many times that for the moment, small and micro-sized enterprises, with huge employment opportunities, are concerned with the vitality and prosperity of the Chinese economy; in the long run, promoting mass innovation and entrepreneurship through supporting their development would have great importance for the transformation and upgrades of China’s economy.

“The large number of small and micro companies generated by mass innovation and entrepreneurship will be new drivers for China’s economy,” he said.

Premier Li also said at the meeting on Sept 27 that small and micro-sized enterprises are highly sensitive to market changes, and they not only can satisfy people’s diverse demands through customized production, but also help increase the strengths and competitiveness of big enterprises by providing matching products with price advantages.

He said that the government should increase policy support, pushing big enterprises to increase their competitiveness and develop prosperous small ones to spur the vitality of China’s economy.

“We should increase financial support to small and micro businesses, to address their difficulties in financing and ease their high financing costs,” Premier Li said.

Since 2013, the State Council rolled out many measures to encourage financial institutions to better serve small and micro-sized enterprises in financing. Data shows that the loan balance of China’s small and micro-sized enterprises in late June reached 22.6 trillion yuan, 1.95 times that of 2012, 32 percent of total enterprise loans.

Targets have been basically reached in the growth rate of bank lending to small and micro businesses not lower than lending across the board, number of individual loans and rate for loan approvals no lower than the same period last year.

Problems still exist in financing. Although some small and micro-sized enterprises have obtained orders and sales channels, they find nowhere to get loans, Premier Li said.

To boost policy support and encourage financial institutions to step up services, the credit ceiling of VAT exemptions for interest derived from bank loans to small and micro businesses, farmers and self-employed will be expanded from 100,000 yuan to 1 million yuan between Dec 1, 2017, and Dec 31, 2019.

The stamp tax exemption for loan contracts of small and micro businesses and the VAT exemption for those with a monthly sales volume of less than 30,000 yuan will be extended to 2020.

More efforts will be made to put inclusive finance departments of State-owned banks in place at grassroots levels.

The Premier urged efforts to develop inclusive finance and consider farmers, rural businesses and agriculture in related preferential policies.

We should also pay more attention to more than 60 million self-employed businesses in China, which have created a great number of jobs and involve many people’s lives, he said.

Related departments should put policies in place as soon as they can, to enable small and micro businesses to enjoy tangible benefits.

“The healthy development of small and micro enterprises will spur market vitality and social creativity,” the Premier said.