On September 1, Premier Li Keqiang presided over the executive meeting of the State Council, which adopted the decisions to establish National SME Development Funds to enhance the driving force for business launch and innovation through the joint efforts of the government and the market, and adjust and improve the capital proportion system for fixed asset investment projects to promote optimization of investment structure.

 

It is believed that, for expansion of employment, promotion of entrepreneurship and innovation by all and enhancement of driving forces for development, reforming the innovation, financing and investment mechanisms, strengthening targeted regulation, maximizing the effects of positive financial policies and alleviating the pressures of SMEs in financing and investment play an important role. Therefore, it was decided that, the central government will contribute RMB15 billion to lead to a lever and multiplier effect to boost a total scale of RMB60 billion for the establishment of the National SME Development Funds under the participation of private enterprises, state-owned enterprises, financial institutions and local governments. It aims to provide support for growth-type SMEs in the seed and start-up stages by establishing fund of funds and direct investment funds and adopting market-oriented measures. Basically, market-oriented operations, such as fund raising, establishment and management, distribution of earnings and withdrawal at maturity, should be adopted. Priority should be given to social contributors to share related profits and the central government should surrender part of the profits to attract more social capitals and motivate the SMEs to devote to business launch and innovation.

 

Also, it was decided at the meeting that the capital proportion system for fixed asset investment projects should be adjusted and improved to optimize the investment structure. For this, the threshold for investment can be lowered in a reasonable way and investment ability should be improved for more effective investment. Development of public products and services should be accelerated and great efforts should be made to make up for the deficiencies. It aims to promote the restructuring and improvement of people’s livelihood through the reform.

 

It was decided to lower the minimum capital proportion for the fixed asset investment projects in the fields of port, coastal and inland water transportation as well as airport transportation to 25% from original 30%, and lower that for railway, road and urban rail transit projects to 20% from original 25%. To promote the processing and transformation of agricultural products, the capital proportion for corn deep-processing projects will be lowered to 20% from original 30%. The capital proportion for urban underground comprehensive pipe gallery projects, parking lot project in urgent need as well as major special national projects under the approval of the State Council can be lowered to an appropriate extent, too. Moreover, concerning the steel, cement, electrolytic aluminium, coke, polycrystalline silicon and other industries with excess production capacity, the high capital proportion ranging from 30% to 40% currently adopted should be maintained. Financial institutions should follow the principles of “independent review and decision making” to grant credit and substantially strengthen risk prevention. It aims to enhance the capability for further development based on a more reasonable investment structure formed up under the policy guidance featuring combination of support and control.

 

Source: www.gov.cn, September 2, 2015