Shanghai government encourages SMEs with enhanced financial support

Huang Yixuan
The local government is offering greater financial support to SMEs, along with increased incentives, with small and medium-sized SMEs playing a stronger role in Shanghai's economy.
Huang Yixuan

Seeing small and medium-sized enterprises play an essential role in the economy, Shanghai is optimizing the business environment for SMEs.

This year, the city pledges to further support the development of SMEs, mainly focusing on bolstering their stable growth, cultivating more high-quality SMEs, promoting their digital transformation, establishing a system supporting industrial clusters, and enhancing financial support.

For instance, it will practically carry out the measures for stabilizing growth, optimizing structure, and enhancing capacities of SMEs.

The city is also increasing efforts to foster more high-quality SMEs, offering rewards for all the SMEs that are recognized as specializing in niche sectors at the national and municipal levels.

Districts have been asked to give no less than 300,000 yuan (US$43,634) to the newly identified national level "little giants" (leading SMEs specializing in niche sectors) and no less than 100,000 yuan to those at the municipal level.

It sets the goals to cumulatively cultivate over 20,000 innovative SMEs, more than 10,000 municipal level SMEs specializing in niche sectors, and over 700 national level "little giants" by the end of 2023.

Financial facilitation

On financial support, the 2023 national financing guarantee fee reduction, and subsidies for small and micro enterprises will be put into effect.

It will promote guarantor institutions to further reduce fees for small and micro enterprises, to limit the guarantee fee rate at below 1 percent.

Loan discounts will be given medium, small and micro enterprises taking out loans for the first time, and enterprises specializing in niche sectors, to reduce the cost of corporate financing.

Looking back on Shanghai's achievements in supporting SMEs in 2022, the city released detailed rules and regulations on cultivating and managing high-quality SMEs. To date, it has cumulatively nurtured over 7,000 enterprises specializing in niche sectors and 500 "little giants."

The city last year also actively implemented loan subsidies for micro, small and medium enterprise, government-backed financing guarantee loans, supporting a total of 11,199 SMEs, covering a loan size of 48.971 billion yuan.

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