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Gov't Pledges Support for Innovation-based SMEs

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Science and Technology Minister Wan Gang said Monday China's government would provide strong support for small-and medium-sized enterprises (SMEs) to help them tide over the current economic downturn.

"The most effective way to withstand the impact of the global economic meltdown is to accelerate technological innovation, the new economic growth engine," Wan said in a signed article on the front page of Monday's Study Times, run by the Party School of the Central Committee of the Communist Party of China.

Wan attributed SMEs' development hiccups mainly to low-tech products and poor research and development capability.

China has more than 42 million SMEs which contribute more than 60 percent of the nation's GDP, 50 percent of tax revenues, 70 percent of import and export trade and 80 percent of urban employment.

But the number of innovation-based SMEs in China is only about 160,000, much less than in the United States where they made up about 10 percent of the sector, and Israel where they comprised 17 percent.

In China, SMEs refer to enterprises where staff numbers are less than 2,000, annual revenues are under 300 million yuan (US$44.1 million), or with total assets under 400 million yuan.

Wan said to sharpen these enterprises' innovative edge, the Ministry of Science and Technology planned to make research and development resources more accessible for them.

The ministry would help establish a technology platform participated in by universities, research institutes and enterprises. It would coordinate research and development and enable innovation-based SMEs to share the results.

Wan, also vice chairman of the Chinese People's Political Consultative Conference National Committee, said the ministry would set up national State-funded laboratories and technology centers for the SMEs.

To ease technological personnel shortages, the ministry, together with other central departments, would assign 100,000 researchers and technicians from universities and research institutes to the SMEs, Wan said.

(Xinhua News Agency September 1, 2009)