SMEs must make the most of the help offered by the govt

The Central Committee of the Communist Party of China and the State Council, China's Cabinet, recently issued a guiding document to promote the healthy development of small and medium-sized enterprises. A Beijing Youth Daily article comments:

The document put forward a variety of measures to promote the development of SMEs, including further relaxing their market access, establishing a fair and uniform market supervision system, perfecting financing policies and alleviating the burden of tax and fees.

If the tax and fee reduction policies being implemented by the country are a "nutritious feast" for all enterprises, the multiple policies rolled out once again by the top authorities on some key issues facing SMEs, such as the ones targeted at their difficult and expensive financing and heavy tax burdens, are a special "extra meal" tailor-made for these financially weaker enterprises. Against the backdrop of the world's economic slowdown and mounting downward pressure on China's economy, some SMEs in China are suffering from malnutrition, so the "additional meal" comes at the right time. It ushers in a good time for the country's SMEs to make breakthroughs in the market after years of difficult survival struggles. The policy measures promised by decision-makers, if implemented to the letter, will help SMEs overcome their market predicament and achieve more secure and dignified survival and development.

In the Chinese market, there have long existed State-owned, foreign-funded, shareholding and private enterprises, which together constitute a complex and diversified market competition environment. However, SMEs, especially small and micro enterprises, have always faced numerous competition disadvantages. Only full and fair competition from multiple market players and different types of enterprises can make the market healthier and more dynamic.

A market without the participation of SMEs will gradually lead to the emergence of capital oligopolies and the formation of monopolies, which will undercut its potential for sustainable development. Therefore, only with SMEs that can equally participate in market competition can an orderly and dynamic market environment take shape.

Compared with more financially powerful enterprises, SMEs need a more sound market environment, a perfect legal system that can promote innovation, and also special care and support from relevant regulators and financial institutions. It is encouraging that the latest policy measures will do more in these aspects.

Boosting the healthy development of SMEs is a long-term project and various favorable policies should be implemented over the long term. SMEs also require a healthy market environment, the rule of law and the care and support of the regulatory authorities and financial institutions for their development.