Wen urges financial support for small businesses

BEIJING - Chinese Premier Wen Jiabao has urged stronger financial support for China´s small businesses and better regulation of private lending activities to prevent risks of capital shortage from spreading.

Small enterprises should be a priority of bank credit support and enjoy more tax preferences from the government, said Wen during visits to east China´s economic hub Zhejiang Province on Monday and Tuesday.

Banks should increase their tolerance of the non-performing loan (NPL) ratio of small enterprises, set targets for the proportion and growth of loans to small companies and reduce the small businesses´ cost of securing credit, said the premier.

Small businesses, which create 80 percent of China´s jobs and generate 60 percent of the country´s industrial output, have long complained about difficulties in securing loans from banks, which prefer to lend to large companies that are considered safer bets.