BEIJING, Aug. 12 (Xinhua) -- Direct financing channels will be expanded in order to aid cash-strapped small businesses, China's cabinet said on Monday.
A more comprehensive and multi-level capital market will be developed to encourage direct financing and expand financing channels for small businesses, according to a statement from the State Council.
Finance access standards on the Growth Enterprise Market (GEM) will be moderately relaxed for growth- and innovation-based enterprises, the statement said, adding that refinancing for listed small businesses will also be on the agenda.
The government will build a sound National Equities Exchange and Quotations (NEEQ) for small and medium-sized enterprises (SMEs), as well as create more financing products for them, the statement said.
More trials for privately-placed bonds for SMEs will be encouraged in order to increase bond issuance and build a quick and flexible financing mechanism for the GEM, NEEQ and corporate bond market.
Securities firms, private equity funds and venture investment firms will be encouraged to offer customized financing services to SMEs, the statement said.
With the economy slowing for several quarters, the government is looking to small businesses to stabilize growth and employment.
In late July, the government announced that it would suspend the value-added tax and turnover tax for businesses with monthly revenues of less than 20,000 yuan (3,270 U.S. dollars) starting from Aug. 1.
According to the Ministry of Industry and Information Technology, 99 percent of companies registered in China are small or medium-sized enterprises. They provide up to 80 percent of urban jobs and 60 percent of China's economic output.