China to Redefine SMEs Giving Small Firms Wider Access to Gov’t Funding
Oct. 27 – China’s Ministry of Industry and Information Technology is in the process of redefining small and medium-sized enterprises in the country, with the aim of leveling the playing field and providing fairer competition for smaller companies by opening channels of government funding for small enterprises.
Under the current definition, medium-sized enterprises are firms that employ 300 to 2,000 people, earn RMB30-300 million annually in sales, and own RMB40-400 million in assets. Small firms are defined as having fewer than 300 employees, earning less than RMB30 million annually in sales, and owning less than RMB40 million in assets.
While the exact details of the new categories of SMEs remain under speculation, Song Xinli, deputy secretary-general of China International Cooperation Association of Small and Medium Enterprises, told China Daily that the ministry has already come up with a draft that proposes narrowing the scope of medium-sized companies and expanding that of small-sized companies. It also proposed the creation of another category – micro-sized companies.
Nearly 99 percent of China’s enterprises are small or medium enterprises, accounting for 60 percent of China’s overall GDP. The government has a large stake in enabling the growth of small enterprises and making sure that the market does not stagnate because of the influence of larger companies.
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