China will take more steps to ease the financing difficulties of small and medium-sized enterprises, so that they can withstand the COVID-19 pandemic challenges and rising economic uncertainties, officials said during a high-level meeting.

The meeting, chaired by Vice-Premier Liu He, urged financial institutions to improve their lending capacity continuously, to make sure that they “dare to lend, are willing to lend, are able to lend and can lend effectively”.

Due to the pandemic and the rising economic uncertainties, the country’s SMEs have been facing several hardships like lack of effective market demand and higher labor and raw material costs. The meeting urged the departments concerned to offer targeted help to SMEs, especially in easing the financing difficulties of SMEs and protecting their legal rights and interests.

More efforts should also be made to boost the support policies, services and the business environment for SMEs, so as to encourage, support and guide the healthy development of the private economy.

Industry experts said that SMEs are the main driving force of the country’s productivity and the main stabilizer for employment and industrial chains. Supporting SMEs is necessary to ensure steady economic growth in the upcoming months.

Nearly 50 percent of the nation’s tax revenue and 60 percent of China’s GDP come from SMEs. The latter are also responsible for 70 percent of technology innovation and 80 percent of urban employment in China, according to the Ministry of Industry and Information Technology.

The ministry said it plans to nurture 10,000 SMEs into champions or sector leaders over the next three to five years to speed up the creation of an industrial ecosystem among large and small enterprises.

“The ministry will also accelerate the third-party assessment of the SME environment and strive to improve the public service platforms for such enterprises,” said Minister of Industry and Information Technology Xiao Yaqing.

Last year, China SME Development Fund Co Ltd was set up in Shanghai to promote the sustainable growth of SMEs in key sectors. The fund has a registered capital of 35.75 billion yuan ($5.1 billion). The Ministry of Finance acts as a limited partner to the fund with a 42.66 percent stake amounting to 15.25 billion yuan.

The fund will fully leverage the multiplier effect of central fiscal funds to play an important role in helping SMEs cultivate new business formats, innovative models, fresh growth and added momentum.

During the fourth quarter of last year, the Small and Medium Enterprises Development Index, based on a survey of 3,000 SMEs, rose by 0.2 point to 87 on a quarterly basis, according to the National Development and Reform Commission.

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