China expands policies to help SMEs prosper

China has announced a series of fiscal measures to help the country’s small and medium-sized enterprises (SMEs) with their digital transformation programmes, including updating their payroll processes.

The Ministry of Finance also pledged to streamline its procurement procedures, to enable SMEs to compete with their larger rivals. The ministry has also confirmed that the policy that earmarks at least 40% of procurement contracts be awarded to SMEs will be extended to the end of 2025.

To help SMEs improve their payroll procedures, the ministry is to continue to offer one-off subsidies to smaller businesses that recruit new college graduates, graduates who fail to find jobs within two years of their graduation or young unemployed people.

The measures follow the central government’s release of a host of measures in recent months to sustain the momentum of the economic recovery and help businesses.

According to the Ministry of Industry and Information Technology, there are more than 52 million SMEs in China at the end of 2022, contributing more than half the nation’s tax revenue, over 60% of national GDP and over 80% of urban employment.

Meanwhile, the Ministry of Finance said it is to set up pilot projects in selected cities to help foster the digital transformation of SMEs, and will offer subsidies to participating companies.

The national development fund for SMEs will continue to support the growth of smaller companies in their start-up phase, the ministry said.

Liang Si, a researcher at the Bank of China’s research institute, said the healthy operations of SMEs have been crucial to China’s economic performance, and beefing up support for them is key to the nation’s efforts to sustain the momentum of its economic recovery.

The latest measures will help SMEs by reducing their operating costs, enabling easier access to financing and boosting their role in the market, Liang said.

“This comprehensive approach is expected to provide effective support for SMEs, enabling them to play a significant role in stabilizing growth and employment,” he said.

China and Asean pledge to improve mutual trade

China and member countries of the Association of Southeast Asian Nations (Asean) are expected to embrace a brighter shared future, officials said at the recent 20th China-ASEAN Expo.

“This year marks the 20th anniversary of the China-ASEAN Expo, or CAEXPO, as well as the establishment of the China-ASEAN strategic partnership. With high-standard opening-up bringing new opportunities, trade and economic cooperation between both sides has seen rapid improvement,” Li Fei, China’s vice-minister of commerce, said at the event.

“Both sides have become each other’s largest trading partner, with cumulative two-way investment being boosted and upgraded,” he said.

He added that China will make efforts to boost institutional opening-up, by making it easier for foreign entities to invest in the country, and focusing on increasing trade in both traditional industries like agriculture and emerging ones like low-carbon development and the digital economy.

Against the backdrop of a depressed global economy, co-operation between China and ASEAN has become “a bright spot”, he said.

Kao Kim Hourn, secretary-general of ASEAN, said the robust growth of ASEAN and China comes from the two sides’ ability to adapt to global instability and uncertainty. “In response to unprecedented challenges during the Covid”-19 pandemic, the two sides chose to reinforce efforts for free, fair and open trade whereas some countries resorted to inward-looking and protectionist policies,” he said.

China has been ASEAN’s largest trading partner since 2009, with trade volumes increasing over the years. Last year, bilateral trade value reached $975.3 billion. The ASEAN-China Free Trade Area (ACFTA ) has contributed to the expansion of trade and investment, benefiting both sides. Negotiations for ACFTA 3.0 were officially launched early this year to further liberalize and facilitate bilateral trade flows.

He said that promoting China-ASEAN infrastructure connectivity is important as well. “This connectivity not only facilitates the movement of goods and services but sparks innovation and the exchange of ideas.”

The China-ASEAN partnership is a great example of strengthening multilateral cooperation without leaning toward protectionism, unilateralism or economic nationalism, the China Daily website reported.

“Given the complex economic and geopolitical situation globally, the two sides, as members of the Regional Comprehensive Economic Partnership, should further strengthen economic and trade ties, to contribute to quicker recovery from the pandemic as well as international conflicts,” officials said.