January 16, 2014 / 10:46 AM / 4 years ago

China says smaller firms will get more loans, other help

BEIJING (Reuters) - China said on Thursday it will take steps to boost bank lending and subsidies to small and medium-sized businesses in labor intensive industries, many of which are facing a tougher business environment.

A joint statement issued by nine government departments outlined broadly how smaller firms would be assisted, but did not give specifics on what kind of lending help will be extended.

Among the bodies issuing the statement was the China Banking Regulatory Commission and the Ministry of Industry and Information Technology.

The statement said that the government would “develop financial products and services fit for small- and medium- sized firms in labor intensive industries and set loan rates reasonably”.

It also said export tax rebates and clearance of goods at customs will be sped up to help small exporters.

China’s small- and medium-sized enterprises (SMEs) account for 60 percent of its gross domestic product and some 75 percent of new jobs created in the country, but they are struggling to cope with soft global demand.

Despite China’s rapid credit growth, loans have become harder to come by for small firms, as Chinese banks generally prefer to lend to big, state-linked firms.

The industry and info-technology ministry said it would encourage private investors to invest in labor-intensive industries, and will ensure that tax breaks announced previously for small companies are properly administered.

Scores of factories in China’s manufacturing heartlands have closed earlier than usual for the country’s annual Lunar New Year holidays at the end of this month, workers and owners say.

Reporting by Xiaoyi Shao and Koh Gui Qing; Editing by Richard Borsuk

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