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China to improve support for small firms: official

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BEIJING, Feb. 7 (Xinhua) -- Chinese government will roll out more policies tailored for boosting the healthy development of small and micro-sized firms, an official said Tuesday.

Ministries of finance and industry are finalizing details of the operation of a 15-billion-yuan fund created to support small businesses that face difficulties in loans and rising costs, said Zhu Hongren, chief engineer with the Ministry of Industry and Information Technology, at a press conference in Beijing.

The central government has decided to earmark 15 billion yuan (2.38 billion U.S. dollars) to establish a development fund for small and medium-sized enterprises, particularly focusing on newly-formed ones.

Zhu said small and micro enterprises began facing growing challenges of rising costs stemming from raw materials and labor since the fourth quarter of 2010. Moreover, weak overseas demand has also hurt some export-based companies.

To address these difficulties, the State Council, China's cabinet, last October decided to raise the tax threshold for collecting corporate value-added taxes and business taxes, extending a policy to halve business income taxes by another four years, and forgiving banks' stamp tax on lending contracts with small firms for three years.

The State Council last Wednesday called for more efforts to support the sound development of small and micro-sized enterprises as they serve as a significant channel for creating jobs.

Zhu said that with concerted efforts, the nation's small and micro-sized businesses are unlikely to experience a massive wave of bankruptcies this year due to cash flow failure.

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