CHINA'S central bank is to continue its prudent monetary policy while increasing support for small businesses as part of the country's efforts to help hedge a slowing economy.
"Small and micro enterprises are important to China's economic development," Zhou Xiaochuan, governor of the People's Bank of China, said in an article for yesterday's People's Daily.
"Supporting small and micro enterprises in an extremely complicated economic situation ... could help stabilize economic growth and promote restructuring," Zhou wrote.
He said China was facing many uncertain factors and strong slowdown pressure.
The central bank will operate a sensible monetary policy and maintain a reasonable credit supply to create a sound financial environment for small firms, Zhou said.
The central bank will also encourage banks to increase lending to small firms with incentives, nurture small-scale banks, develop fully-fledged equity and bond markets to facilitate fundraising, and encourage banks to offer better Internet and mobile payment services to small firms.
The comments were the latest among an array of supportive policies recently released to support the development of small firms.
On Wednesday, the State Council decided to waive value-added and turnover taxes on small businesses that had monthly sales of less than 20,000 yuan (US$3,260), beginning next month.
China's top economic planner said on Thursday that it would allow more small businesses to issue bonds and more institutional investors to raise funds to invest in small firms.
Foreign exchange rules for service companies will also be relaxed from September.
Economists say the policies will effective in boosting the private sector, which plays an important job creation role.
