NPC tables draft law to promote development of SMEs

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By CGTN's Hou Na

The Standing Committee of the National People's Congress (NPC) finished its bimonthly session in Beijing on Tuesday with lawmakers passing a draft amendment to promote the development of SMEs by cutting costs and supporting innovation.

The draft law has been submitted for a second reading.

Lawmakers held a group discussion on Tuesday. /CGTN Photo

The draft says that authorities should set clear policies for tax credits, easy access to finance and lower start-up costs.

Lawmakers also said that authorities should strengthen supervision and inspection of funds for the development of SMEs.

Lawmakers held a group discussion on Tuesday. /CGTN Photo

Lawmaker Zheng Gongcheng said that compared with the first reading, the new draft suggested that the State Council should define clear responsibilities for authorities at provincial, city and county levels to promote development.

He said the new law expanded the legal terms from 40 to more than 60, making it clear that SMEs can access both financial and taxation support.

But he warned that the biggest challenge of implementing the law lies in whether the government can establish an effective administrative coordination mechanism.

The draft encourages cooperation between civilians and the military, support for innovation and training for human resources.

Lawmaker Yao Sheng said , "Instead of allowing the provincial governments to set up the special fund for SMEs, I suggest the law changed the term to only allow the State Council to do that."

Compared with large enterprises, SMEs are more cost sensitive and care more about short-term returns. Experts say that due to SME's limitations of size and capital, support from the government and cooperation with the public sector are important for them to go global.

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