Small and medium-sized enterprises in China,
especially those engaged in science and technology, are mostly
choked by acute shortage of fund, a political advisor has
"It has a direct bearing on the national strategy of
innovation, as 66 percent of patents, 74 percent of technological
innovations and 82 percent of new products in China come from small
and medium-sized enterprises," said Zhang Huaben, a member of the
National Committee of the Chinese People's Political Consultative
"However, the most prominent problem Chinese small and
medium-sized companies have come across is the difficulty in
financing," said Zhang.
Zhang suggested policies should be mapped out to loose
the criteria for small and medium-sized companies to go listing and
to step up the building of a property right market.
The government should encourage venture capital to be
involved in the merger and acquisition of small and medium-sized
enterprises through preferential tax and loan policies, he
"It will be a good try to set up science and
technology banks in high-tech zones to grant loans mainly to
well-developed high-tech enterprises," he said.
A credit system should also be established for small
and medium-sized companies.
Lin Yifu, a renowned economist and CPPCC member, also
pointed out that large banks are more inclined to offer loans to
large enterprises and big projects, which have hampered the
development of small and medium-sized enterprises.
He called on the government to give support to
domestic small and medium-sized banks, saying that regional small
and medium-sized banks will be the most effective institutional
arrangement to provide financial services for small and
(Xinhua News Agency March 11, 2007)