Premier Li Keqiang said during an executive meeting of the State Council on Sept 17 that the government should help small and micro enterprises to survive and thrive - and not only encourage them to enter the market.
Zhang Mao, minister of the State Administration for Industry and Commerce, said during the meeting that more than 1.92 million new enterprises have appeared since the reform of the business registration system started on March 1 - an increase of 61 percent compared to the same period last year.
Li said the number of small and micro enterprises and privately-owned businesses has increased dramatically due to the streamlining of administrative approvals and reform of the business registration system.
“The economy faces relatively big downward pressure this year and, in particular, economic growth in July and August slowed - but the employment has been increasing at a stable pace,” he said. “Part of the reason is the growth of the service industry, but a more important cause is that the reform encouraged people to start their own businesses.”
As a result of the reform, people who want to start a business can now experience simplified administrative procedures when applying for a business license, and thus more entrepreneurs are able to enter the market.
However, if they find it hard to develop their business after they enter the market, they will be disappointed, and the situation will in turn dampen the enthusiasm of others who want to start their own businesses, Li said.
“It’s natural for small and micro enterprises to close down, but we should try our best to help them last longer, and we should thus encourage more and more people to start their own businesses,” he said. “We have kindled the spirit of entrepreneurship among the public, and now we should find ways to keep it going and become stronger. We should not only assist them to start a business - we should also help their business survive and develop.”
Statistics show that middle and small enterprises in Europe and Japan survive 12.5 years on average, while in the United States, where competition is more fierce, middle and small enterprises survive 8.2 years on average. On the other hand, middle and small companies in China survive only 3.7 years on average - among which small and micro enterprises survive less than 3 years.
Li asked the government to give more freedom to entrepreneurs.
“The purpose of the work of the government is to serve the people. It should make sure that its economic policies serve the enterprises, and should allow entrepreneurs to fully realize their potential.”
He vowed that the government will further streamline administrative approval procedures and give more freedom to enterprises.
The participants in the executive meeting decided to provide further tax relief to small and micro enterprises. Li asked relevant government departments to monitor the development of small and micro enterprises that were established since March, when the reform of business registration started - and offer financial support to them.
Large financial institutions should strengthen their support to middle-and-small sized companies, he said.
Additionally, the government should also offer support to small and private financial institutions lending loans to small and micro enterprises - and not only strictly supervise these financial institutions.
Li said small and micro enterprises are now vital to job creation, they provide employment opportunities and prevent the economy from declining, and they are also essential for maintaining the development of China’s economy in the long run - and he asked government departments to coordinate and cooperate in supporting small and micro enterprises.