New | Beijing backs equity crowdfunding to develop entrepreneurial economy
State Council encourages more entrepreneurial activity and vows to cut red tape for new firms
The mainland will promote greater use of equity crowdfunding for startups to encourage entrepreneurship in the world's second-largest economy, a cabinet document said on Saturday.
The government has repeatedly said it wants to promote more entrepreneurial activity in the state-dominated economy to stimulate employment, a top priority as the economy slows.
While leaders have pledged strong support for online business, however, they have until now generally refrained from showing enthusiastic support for crowdfunding.
A State Council document posted on the central government's website called for expanding equity crowdfunding projects to help small companies raise funds as a "useful complement" to traditional equity financing while underlining the need to protect investors' rights and minimise financial risks.
The document said financial support, including taxation incentives, should be provided to support crowdfunding.
Yingda Securities chief economist Li Daxiao said he believed the document, approved by Premier Li Keqiang, was aimed at facilitating the economy's transition from traditional labour-intensive mass production to one based more on innovation, as well as creating employment through the starting up of new ventures.