At the State Council executive meeting chaired by Premier Li Keqiang on June 5, more measures were adopted to further implement the innovation-driven development strategy and incentivize business start-ups and innovation nationwide.

The Chinese government places great emphasis on promoting business start-ups and innovation. General Secretary Xi Jinping stressed the importance of fostering an enabling environment conducive to innovation, entrepreneurship and creativity to fully unlock the potential of the whole society. Premier Li Keqiang stated in the Government Work Report that more efforts need to be made to bolster business start-ups and innovation nationwide, and encourage more private parties to engage in such activities. The government will expand the space for economic and social development, strengthen comprehensive services and give play to the path-finding role of innovation and entrepreneurship demo centers.

Recent years have seen a significant improvement in China’s policy environment for business start-ups and innovation, as evidenced by the surging enthusiasm across society for innovation and entrepreneurial activities. The number of market entities has passed the 100 million mark. Between January and April this year, as many as 18,600 new businesses were registered on an average day. Innovation is playing an increasingly bigger role in creating jobs.

“Our efforts in support of business start-ups and innovation have effectively boosted employment and stimulated innovation. Under the current situation, business start-ups and innovation can make a special difference in spurring market vitality and supporting the employment of key groups of people,” Premier Li said.

The meeting decided on more steps to drive business start-ups and innovation to further implement the innovation-driven strategy and energize the vitality of market players.

The important role of business start-ups and innovation will be harnessed in supporting employment, including creating more jobs that suit the needs of key groups of people such as college graduates and demobilized military personnel. Reform in transforming government functions will be expanded. The government will draft and issue the Regulations on Improving the Business Environment and work to lower institutional transaction costs. Support will be given to encourage innovation and entrepreneurship demo centers in undertaking pilot programs in the approval and implementation of science and technology projects, rights confirmation of research findings and the commercialization of research findings.

“Our initiative of encouraging business start-ups and innovation needs to play a unique role in driving technological innovation,” Premier Li said. “Boosting business start-ups and innovation can help incentivize innovation in both application and basic research.”

It was also decided at the meeting to build platforms for business start-ups and innovation, and to promote the integrated development of companies in different sizes. Incentive mechanisms regarding stock rights and remunerations will be further refined to promote innovation by enterprises of all types.

“We should work to refine policies in supporting business start-ups and innovation, and exercise accommodating and prudent regulations, promoting the integrated development of companies of different sizes,” Premier Li said.

The Internet Plus model will be upgraded. Efforts will be made to accelerate the development of industrial internet and promote broader application of the Internet Plus model in medical care, elderly care, education and other social sectors.

Financial institutions will be guided to lower real interest rates and overall cost for loans to micro and small enterprises. A higher ratio of nonperforming loans made to micro and small firms will be allowed. The NPL ratio of such loans will be relaxed to no more than 3 percentage points higher than the overall NPL ratio, from the current 2 percentage points. Venture capital firms will receive support in financing through bond issuance.

“Entrepreneurial activities and innovation will bolster the development of the Internet Plus model. This will help foster new drivers of growth, deliver better services, boost consumption and expand employment,” Premier Li said.