Guangdong targets SMEs in 10b yuan programme

PUBLISHED : Saturday, 06 December, 2008, 12:00am
UPDATED : Saturday, 06 December, 2008, 12:00am

More than two months after the global financial crisis erupted, the Guangdong government unveiled its first comprehensive economic stimulus programme yesterday, an effort aimed at small and medium-sized enterprises.

The more than 10 billion yuan (HK$11.2 billion) programme was announced at an SMEs conference in Guangzhou, according to a spokeswoman for the Economic and Trade Commission, a provincial department responsible for SME development.

The spokeswoman said Guangdong Communist Party Secretary Wang Yang and Governor Huang Huahua had urged hundreds of officials at all levels to support SMEs through the difficulties.

'The programme was to implement central government instructions, especially Premier Wen Jiabao's to help SMEs,' she said.

Last month, Mr Wen visited Guangdong for the second time in six months, urging all officials to support SMEs by giving them easier access to credit extensions and loans.

The newly released stimulus programme dovetails with Mr Wen's requirement that authorities first 'relieve SMEs' financing difficulties'.

The nine-page programme outlined 23 plans, drawing in all provincial departments dealing with the economy, and indicated that Guangdong's help to the SMEs would mainly be in terms of finance.

The programme calls on all financial institutions in the province to implement the central government's financial support policies. It says all banks should simplify loan applications and shorten examination and approval time for SMEs.

With SMEs struggling to source capital, the programme said Guangdong would also earmark 2.2 billion yuan next year as loans or subsidies for business technology upgrades, innovation or export expansion.

Predicting that next year would be one of the hardest for all businesses, Guangdong has decided to release at least 8.5 billion yuan in the next two years to speed up construction for planned SME relocations within the province, two years ahead of the original schedule.

Mr Wang praised SMEs yesterday for their contributions to 30 years of development in Guangdong, but he also said the global financial crisis was forcing the government to help SMEs upgrade their technology and overcome the difficulties, both important measures to stimulate domestic demand.

Meanwhile, Mr Huang said the government was examining the possibility of partly or completely refunding the sales tax and income taxes Guangdong would collect from enterprises this year and next year.

The worsening global crisis has seen Guangdong's overseas orders fall dramatically. As one of the mainland's major export bases - and famously billed as the 'world's factory' - Guangdong has also taken other steps to deal with its huge impact.

It promised last month to invest at least 176 billion yuan in transport and energy projects next year.

But it has not specified how much direct investment it would inject into improving living conditions for residents, such as education and health care.