Four Departments Signal Six Major Moves to Help Enterprises

132 Comments 2024-06-14

Encourage platform companies to focus their traffic on three types of business entities; optimize the policy of loan renewal without principal repayment to help business entities alleviate cash flow difficulties; support more than 1,100 "little giant" enterprises in technological transformation and equipment renewal; increase the intensity of regulatory enforcement against illegal charges related to enterprises; standardize enterprise inspections and intensify efforts to rectify excessive and indiscriminate inspections.

Efforts should be made to address the practical difficulties faced by small and micro business entities in production and operation, effectively reducing the burden on enterprises; prevent and stop unfair competition; vigorously rectify prominent issues in administrative law enforcement; alleviate the financing difficulties of small and micro enterprises; accelerate the introduction of the "Private Economy Promotion Law"; and strengthen the construction of communication mechanisms for enterprise law enforcement appeals. The four departments have stimulated the vitality of business entities and helped enterprises through difficulties. Today, the four departments jointly issued six policy measures to help enterprises solve practical difficulties.

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On October 14, the State Council Information Office held a press conference, where the State Administration for Market Regulation, the Ministry of Industry and Information Technology, the Ministry of Justice, and the State Financial Regulatory Administration jointly introduced the situation of increasing assistance and support for enterprises.

The director of the State Administration for Market Regulation, Luo Wen, said that precise support for the development of different business entities and effective reduction of enterprise burdens will be provided from four aspects: supporting merchants on internet platforms to expand market transactions, providing precise assistance to individual industrial and commercial households, promoting the use of quality and reputation as a basis for enterprise financing, and accelerating the process of formulating and revising key standards related to equipment renewal and consumer goods exchange for the old.

The deputy minister of Industry and Information Technology, Wang Jiangping, said that together with relevant departments, efforts will be made to build a mechanism to promote the development and growth of specialized, refined, and innovative small and medium-sized enterprises (SMEs), improve the "selection, nurturing, and excellence" full-cycle cultivation system, and promote the high-quality development of specialized, refined, and innovative SMEs.

Wang Jiangping revealed that in terms of scientific and technological innovation, this year, more than 1,000 key "little giant" enterprises will be supported by the central finance to create new momentum, tackle new technologies, develop new products, and strengthen the supporting capacity of the industrial chain. Through special re-lending projects, more than 1,100 "little giant" enterprises will be supported in technological transformation and equipment renewal. A pilot service resource directory will be published for SMEs, with priority support for "little giant" enterprises to participate in the application plan for key products and key processes.

The deputy director of the Financial Regulatory Administration, Cong Lin, said that multiple measures will be introduced to unblock the bottlenecks and blockages in the financing of small and micro enterprises. For example, the policy of loan renewal without principal repayment will be optimized to help business entities alleviate cash flow difficulties.

Furthermore, the role of insurance in providing guarantees will be further utilized, promoting the use of performance bond insurance and customs duty insurance to replace guarantees in fields such as construction engineering and foreign trade exports. It is reported that this measure has helped 520,000 enterprises to activate existing funds and reduce the pressure of cash flow in the first half of the year.

The deputy minister of Justice, Hu Weilie, said that in response to the prominent issues in enterprise law enforcement, efforts will be made to address the issues of arbitrary and inaction in law enforcement that enterprises and the public strongly reflect.In the past two years, many market operators have faced difficulties in their operations, with private enterprises lacking confidence and having unstable expectations. Private entrepreneurs generally feel that survival and development are extremely challenging, profitability is increasingly low, and profit margins are severely compressed. In 2023, private fixed asset investment decreased by 0.4% compared to the previous year. The proportion of private investment dropped from 54.2% in 2022 to 50.4% in 2023.

Data from the National Bureau of Statistics shows that in the first two months of this year, the growth rate of private investment turned positive from negative, with a year-on-year increase of 0.4%. However, the growth rate has slowed down since the second quarter. The growth rates of private investment from January to April, January to May, January to June, and January to July were 0.3%, 0.1%, 0.1%, and 0% respectively. From January to August, private investment decreased by 0.2% year-on-year, marking the first negative growth of the year. According to calculations by securities research institutions, private investment in August alone decreased by 1.6%, setting a new low since September of last year.

Currently, the market is calling for more forceful policies and reforms to help enterprises overcome difficulties and boost the confidence of private enterprises.

Precise assistance to individual businesses and guiding online platforms to help merchants increase transaction volumes

Insufficient market demand, sluggish consumer spending, excessive operating costs, and difficulties in obtaining financing and loans are common problems faced by private enterprises and other market operators.

In response, Luo Wen introduced that the State Administration for Market Regulation will launch policies in four areas to support the development of different business entities and effectively reduce the burden on enterprises.

At present, countless small and micro enterprises are using the internet and other platforms to seek survival and provide a large number of job opportunities. Luo Wen said that the State Administration for Market Regulation will guide platform companies to use traffic to help merchants on the platform improve brand awareness and expand market transaction volumes. To this end, the "Opinions on Guiding Online Trading Platforms to Play a Positive Role in Traffic and Support the Development of Small and Micro Business Entities" will be issued, encouraging online trading platform companies to reasonably allocate traffic resources, focusing on three types of business entities, namely agricultural product operators, characteristic operators, and newly settled operators.

At present, small and micro enterprises generally face difficulties in financing. In response, the State Administration for Market Regulation will promote the use of quality and reputation as the basis for corporate financing. Efforts will be made to promote financial institutions to include quality capabilities, quality management, quality brands, and other quality and reputation elements of enterprises into their credit approval and risk management models, especially to tailor financial products and services for small and micro enterprises. Differential arrangements will be implemented in terms of credit limits, interest rates, financing terms, and repayment methods to improve the availability and convenience of corporate financing. At the same time, a combination of equity, funds, bonds, and other financing tools will be promoted, with an annual quality financing credit enhancement credit limit of 300 billion yuan, which will benefit all types of enterprises.

Individual businesses are the most numerous business entities in China, playing an important role in stabilizing employment, benefiting people's livelihoods, and promoting development. Individual businesses of different types and scales also face different difficulties. In response, Luo Wen said that the State Administration for Market Regulation will implement precise assistance to individual businesses by categorizing them into three types: survival, growth, and development, and four categories: famous, special, excellent, and new. A unified national "Individual Business Directory" will be established by the end of this year.

"On this basis, we will also work with relevant departments to introduce more targeted policies in the fields of taxation, social security, employment, and financing, and promote local governments to provide precise assistance to individual businesses in terms of location, costs, training, and recruitment," said Luo Wen.Currently, a new round of large-scale equipment upgrades is accelerating, offering enterprises a broad market development space. Luo Wen stated that the State Administration for Market Regulation will expedite the process of formulating and revising key standards related to equipment updates and the exchange of used consumer goods for new ones. The focus will be on upgrading energy consumption and emission technology standards, enhancing product quality and safety standards, and increasing the supply of recycling and reuse standards, effectively using standard improvements to drive equipment updates and the exchange of used consumer goods for new ones.

Promoting investment and expanding consumption measures to help enterprises expand markets

At present, many industrial enterprises are facing a shortage of orders. As the competent department of the industry, the Ministry of Industry and Information Technology (MIIT) will introduce a series of specific measures to promote consumption and expand domestic demand, assisting enterprises in expanding markets and unleashing vitality.

Wang Jiangping stated that firstly, focusing on investment-driven initiatives, the implementation of technological renovation and equipment upgrade projects will be carried out. Efforts will be made to expedite the approval and funding of projects supported by the ultra-long-term special treasury bonds, and to accelerate the disbursement of the signed 150 billion yuan in technology renovation re-lending. Recently, a batch of new special re-lending projects has been recommended to banks, and preparations are being made in advance for the 2025 pilot cities for new technological renovation in the manufacturing industry. The organization of industrial field reserve projects to accelerate construction and start work as soon as possible, to form more physical work volume. Currently, there are about 36,000 ongoing and planned industrial projects, which are expected to drive investment of over 11 trillion yuan in the next three years.

Secondly, focusing on expanding consumption, a series of actions to improve supply and promote upgrades will be organized. First, the exchange of used consumer goods for new ones will be promoted. To promote the exchange of used electric bicycles for new ones, the MIIT has formulated and implemented mandatory national standards for electric bicycle lithium batteries, chargers, and electrical safety, releasing two batches of 31 electric bicycle enterprises that meet the standard conditions. Second, the promotion of new energy vehicles will be intensified. At the end of the year, a special event for new energy vehicles in rural areas will continue to be held, simultaneously promoting the rural deployment of charging infrastructure, and adding a batch of pilot cities for the full electrification of public domain vehicles. Third, the construction of a Chinese consumer product matrix will be initiated, selecting thousands of Chinese consumer products from three dimensions: historical classics, contemporary excellence, and trendsetting innovation, launching the first batch of 100 high-quality brands with global recognition, and organizing global communication and promotion activities. Fourth, the layout and construction of characteristic food production areas across the country will be organized, along with the "improve supply and promote upgrade" in textiles and garments, as well as the "Foodie Festival" and other "three products" national activities.

Thirdly, deepening the application of scenarios, cultivating and strengthening new quality productive forces such as low-altitude economy and intelligent manufacturing. Guided by the construction of the low-altitude industry ecosystem, support will be given to regions with good airspace resources and rich application scenarios to take the lead in trials, and to create a multi-scenario application demonstration system for low altitude according to local conditions, to accelerate the cultivation of new low-altitude consumption formats such as low-altitude logistics, urban and inter-city air traffic, and low-altitude cultural tourism, and to expand new models such as agricultural and forestry planting protection, inspection and inspection, emergency rescue, etc., to create a new engine for economic growth. Implementing opinions to promote the innovative development of future industries will be introduced, and new fields and new tracks such as humanoid robots, brain-computer interfaces, and 6G will be vigorously developed. At the same time, support will be given to enterprises to create an "upgraded version" of intelligent manufacturing, focusing on the application of intelligent manufacturing technology in typical industries, and gradually cultivating a batch of intelligent factories at the basic, advanced, excellent, and leading levels.

Unblocking the bottlenecks and chokepoints in small and micro enterprise financing

Capital is the lifeblood of enterprises. At present, small and micro enterprises and private enterprises are facing difficulties in capital turnover.

Junglin stated that the Financial Regulatory Authority will introduce multiple measures to unblock the bottlenecks and chokepoints in small and micro enterprise financing.

The first measure is to optimize the policy of loan renewal without principal repayment, to help operating entities alleviate difficulties in capital turnover. The scope of this policy not only includes small and micro enterprises but also temporarily extends to medium-sized enterprises. "It is also necessary to emphasize here that loans that meet the conditions for renewal should not be downgraded in loan classification solely because of the loan renewal factor. Banks need to strengthen risk management, comprehensively consider the borrower's performance ability, guarantees and other factors, and reasonably determine the risk classification of the renewed loan." Junglin said.The second measure involves establishing a financing coordination mechanism with the National Development and Reform Commission to support small and micro enterprises. The core of this mechanism is to set up a dedicated team at the district and county level to build a bridge for precise matching between banks and enterprises. On the enterprise side, it is essential to fully understand the actual operating conditions of enterprises within the jurisdiction, to have a clear picture, to provide precise assistance, and to effectively solve the financing difficulties of enterprises. On the banking side, it is necessary to unblock the bottlenecks and choke points in information transmission and capital conveyance.

Junglin stated that the establishment of the financing coordination mechanism aims to achieve three goals: First, to reach the grassroots level directly. Low-cost credit funds should be directed to the grassroots level to break through the "last mile" of benefiting enterprises and the public. Second, to be fast and convenient. Banks should, in principle, make a decision on whether to grant credit within a month. For enterprises that meet the conditions, banks should open green channels, optimize processes, and speed up the handling. Third, to have an appropriate interest rate. By saving on the cost of information collection, reducing intermediate links, and reducing lending costs and additional fees, the overall financing cost for small and micro enterprises can be reduced.

The third measure is to further leverage the role of insurance in providing protection. In related fields such as construction projects and foreign trade exports, promote the use of performance bond insurance and customs bond insurance to replace cash deposits. At the same time, it also promotes export credit insurance companies to adopt the integrated financial service method of "credit protection + policy financing" to help many export enterprises reduce their concerns.

The fourth measure is to improve the due diligence exemption system. Junglin said: "Recently, the original inclusive credit due diligence exemption notice has been further revised, clarifying various exemption scenarios. For personnel who have basically fulfilled their job responsibilities and only have minor faults, they can be exempted or reduced in responsibility. Many banks have already refined and improved their internal regulations in accordance with regulatory requirements, and the number and proportion of exempted persons have increased."

The introduction of the "Private Economy Promotion Law" stabilizes expectations and boosts confidence.

Compared with a series of support policies, private enterprises and other market operators need more to promote the stability of expectations with the certainty of the rule of law.

On October 10, the Ministry of Justice and the National Development and Reform Commission published the "People's Republic of China Private Economy Promotion Law (Draft for Comments)" (hereinafter referred to as the Draft) on their official websites, and openly solicited opinions from society. This is considered by the industry as a "key move" to boost the confidence of private enterprises.

"Since the draft was openly solicited for comments, the Ministry of Justice has received more than a thousand suggestions and opinions. The formulation of the Private Economy Promotion Law." At the press conference, Vice Minister of Justice Hu Weilie stated that the draft, as China's first basic law specifically on the development of the private economy, implements the requirements for equal treatment and protection of the private economy, constructs a stable development expectation for private enterprises and entrepreneurs, and promotes the long-term mechanism for the development of the private economy.

For the first time, the draft includes "two unswervings" and "cultivating and promoting the spirit of entrepreneurship" into the law, and clarifies that "promoting the continuous, healthy, and high-quality development of the private economy is a major policy that the state adheres to for a long time." This fully shows that promoting the development of the private economy is a major policy that the party and the state have always adhered to and will continue to adhere to for a long time. "Once these contents become legal institutions, they will have stability and rigid constraints, which will certainly promote the continuous, healthy, and high-quality development of the private economy."

It is reported that the draft involves several issues that private enterprises are most concerned about, including promoting fair market competition for private economic organizations, supporting scientific and technological innovation in the private economy, optimizing the investment and financing environment of the private economy, standardizing operations, improving service guarantees, strengthening administrative law enforcement supervision, and maintaining the legitimate rights and interests of private enterprises, among many other contents.The protection of rights and interests is one of the most concerning issues for private entrepreneurs. The draft clearly stipulates that the personal rights, property rights, and operational autonomy of private economic organizations and their operators, as well as other legal rights and interests, are protected by law, and no units or individuals may infringe upon them. The right to reputation, honor, and privacy rights of private economic organizations and operators, as well as personal information, are also protected by law.

The draft also specifies that the implementation of coercive measures such as restrictions on personal freedom and the sealing, seizure, and freezing of property involved in the case should be strictly carried out in accordance with the statutory authority, conditions, and procedures. It is prohibited to use administrative or criminal means to illegally intervene in economic disputes. The draft also refines the case handling procedures and standardizes the enforcement behavior in different locations.

During research, it was understood that the greatest sense of insecurity for entrepreneurs comes from the inability to rely on the weapon of law to protect their legitimate rights and interests when they are infringed upon, which also means that entrepreneurs have lost their last line of defense. Many entrepreneurs believe that the rule of law is the best business environment and the biggest "umbrella" for the protection of private entrepreneurs.

Rectify the enforcement that disturbs enterprises and the enforcement for revenue, and solve the problem of disorderly enforcement.

At present, there are some irregularities in the enforcement involving enterprises, and some administrative law enforcement personnel have uncivilized enforcement behaviors such as rough enforcement. In response to this, Hu Weili said that in view of the prominent problems existing in the current administrative law enforcement, the Ministry of Justice will strongly carry out the rectification of prominent problems in administrative law enforcement, and effectively solve the problems of disorderly and inaction in enforcement that enterprises and the public strongly reflect.

Recently, the Central Office for Rule of Law carried out a rule of law supervision on the rule of law business environment. At present, the Ministry of Justice is working with relevant departments to supervise the rectification of prominent problems such as enforcement that disturbs enterprises and enforcement for revenue. Next, it will urge relevant departments to effectively carry out rectification.

"Recently, we have noticed that opinions on enterprise-related inspections are relatively concentrated, with too high inspection frequency, arbitrary inspections, and repeated inspections, affecting the normal business activities of enterprises." Hu Weili said that in response, the Ministry of Justice will focus on standardizing enterprise-related inspections. In this rule of law supervision, administrative inspections will be a focus, and efforts will be made to increase the rectification, rectification, and standardization of irregular inspections and excessive inspections. Subsequently, some typical cases will be exposed to increase the supervision and rectification efforts.

In addition, the Ministry of Justice will also comprehensively strengthen the supervision of fines. It will standardize the establishment and implementation of fines according to the law, and resolutely prevent the behavior of increasing revenue through fines and substituting fines for management. At the same time, it will promote the establishment and improvement of an economic impact assessment system for enterprise-related law enforcement by law enforcement agencies at all levels, to minimize the negative impact of administrative law enforcement activities on the normal production and operation of enterprises. In addition, it will strengthen the construction of the enterprise-related law enforcement appeal communication mechanism to form a joint supervision effort. Finally, it is necessary to improve the management system of administrative law enforcement personnel and improve the quality and ability of administrative law enforcement personnel.

The State Administration for Market Regulation will also further standardize the law enforcement and supervision behavior involving enterprises. Luo Wen introduced that recently, the State Administration for Market Regulation is about to issue the "Guiding Opinions on Firmly Establishing the Concept of Regulation for the People and Implementing Service-oriented Law Enforcement" and the "Code of Conduct for Market Supervision Law Enforcement". Specifically, it will further standardize law enforcement and supervision behavior from four aspects: first, refine the discretion benchmark to promote proportional punishment; second, optimize the law enforcement method to reflect the temperature of law enforcement; third, standardize daily supervision to achieve non-disturbance; and fourth, strengthen legal service to promote enterprise self-discipline.In the process of departmental law enforcement, the issue of enterprises being subjected to "arbitrary charges and fines" remains prominent. In response to this, Luo Wen stated that moving forward, the State Administration for Market Regulation will intensify its regulatory and law enforcement efforts against illegal charges related to businesses. The measures include: first, resolutely stopping the establishment of illegal and non-compliant fee items; second, increasing the punishment for arbitrary charging behaviors; third, strengthening the legal protection of business-related fee regulation; and fourth, establishing a long-term regulatory mechanism for business-related fees.

For instance, in terms of resolutely stopping the establishment of illegal and non-compliant fee items, the State Administration for Market Regulation will focus on government departments and their subordinate units, as well as industry associations, by enhancing the scrutiny of policy documents at the source of business-related fee policies. For policies found to lack legal basis during inspections, the Administration will promptly promote their amendment or repeal. Regarding financial institutions, utilities for water, electricity, gas, and heating, and other fee-charging entities, the Administration will intensify inspections and spot checks to firmly address issues such as repeated and mandatory charging. The Administration will also improve various catalogs of business-related fees, fully disclose the items, basis, and standards of fees, and prohibit any charges not listed in the catalogs.

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