In 2001, based on the deployment of the first National Working Conference on SME, small and medium-sized enterprises unswervingly advocated the spirit of the Dispatch No.59 in 2000issued by the General Office of the State Council and regarded SME with various ownerships in cities and towns as the target group of their activities and took an approach characterized by standards, supports as well as services and specified the policy system and strengthened the work system and perfected service system by circling on prompt questions in the reform and development of SME to reform and improve the environment for the sustainable development of SME.

1. Extensive cooperation among ministries and the issuance of supporting policies
First of all, the building of credit and credit system for small and medium-sized enterprises. According to the decision spirit of Dispatch No.59 in 2000 issued by the General accelerate the establishment of the credit guarantee system for SME and the Guidance for the Establishment of National Experimental Units of Credit Guarantee System for SME (Dispatch No. 540 for small and medium-sized enterprise in 1999 by the State Economic and Trade Commission), the Notice of the Establishment of National Credit Guarantee System (Dispatch No. 198 for small and medium-sized enterprise in 2001 by the State Economic and Trade Commission) was issued to further specify the basic conditions, the scope for experimental units, supervision and management with regard to the establishment of the credit guarantee system for small and medium-sized enterprises. To speed up the construction of the system, the State Economic and Trade Commission, in accompany with the State Administration of Taxation, issued the Notice of Tax Exemption for Credit Guarantee and Re-guarantee Agencies for SME, which specified three-year operational tax exemption privileges for 226 experimental credit guarantee agencies. More than 360 credit guarantee agencies of various kinds have mushroomed till the end of 2001, covering 30 provinces, autonomous regions and municipalities.

Secondly, coordinating the construction of the credit guarantee system for SME. The State Economic and Trade has, in company with 10 other ministries including the State Bureau of Industries and Commerce as well as Ministry of Public Security, issued Notions for the Strengthening of Management of Credit System of SME (Dispatch No. 368 for small and medium-sized enterprise in 2001 by the State Economic and Trade Commission), to help small and medium-size enterprises raise awareness of their credit standing, improve their credit position, and create a favorable credit environment. It is the first special guidance document concerning the construction of credit system for SME in the country. The document put forward primarily a basic idea of setting up a socialized credit system covering the joint collection, professional evaluation, regular publication and the sharing of information with small and medium-sized enterprises as the target groups of services, the credit guarantee system, bank loan registration and consultation system and credit management system for business enterprises as the foundation, and government promotion and market operation as the basic principle,.

Thirdly, helping SME raise the awareness about quality and improving the quality and management. The Notion of Strengthening Quality Controls of SME (Dispatch No. 290 for small and medium-sized enterprise in 2001 by the State Economic and Trade Commission) was issued, in company with the State Quality Inspection Bureau.

Fourthly, enhancing the study about measures to effectively supervise and manage the credit guarantee system for SME. On the base of comments from the provincial and city Economic and Trade Commission as well as the pilot credit guarantee institutions and strengthening the coordination with government institutions like the Ministry of Finance and the People's Bank of China, to speed up working out relevant policies.

Fifthly, completing the drafting of the Notions of the Creating Fair Competition Environment and Promoting the Healthy Development of Non-public-owned Enterprises, to comply with the rules of the WTO, and to create a favorable environment for SME in which they can bring about fair competition.

2.The legislations for SME have been advanced as initially planned
Bused on the rules and principles of legislation of the National People's Congress, the State Economic and Trade Commission completed the drafting of SME Promotion Act (Draft), and have sent it to the Financial and Economic Commission of the NPC. This will be the first legislation on small and medium-sized enterprises. The draft legislation has been passed on the 89th meeting of the Financial and Economic Commission of the NPC held on Nov. 26th, 2001, and has been submitted to the NPC standing committee for discussion on December of 2001. 
According to the legal procedure in China, the draft need to undergo 3 deliberations by the NPC standing committee, and draw opinions of all parties and it will be eventually enacted after further modification and improvement. The legislation is expected to be issued in the second half of 2002.

In the meantime, the State Economic and Trade Commission has stepped up its supervision and control over the pawn broking industry. After the State Economic and Trade Commission issued the Measures on the Management of the Pawn Broking Industry in its decree No. 22 released in August of 2001, it carried out the cleaning-up and consolidation of the pawn broking industry, based on the Measures on Management of Public Security in the Pawn Broking Industry issued by the Ministry of Public Security (Decree No.26, Ministry of Public Security) and Measures on Management of the Pawning Industry issued by the State Economic and Trade Commission. It also issued License for Pawn Broking for the qualified pawnbrokers.

3. Coordinating the framing of policies and laws, and starting to organize research on the standard of SME.
The current standard applied to small and medium-sized enterprises was issued in 1988, so it carries strong traces of the planned economy. It has been inconsistent with the real demand of the transformation of enterprises under the socialist market economy, and has brought many inconveniences for the instituting and actual implementation of business policies and legislations. To facilitate and coordinate the implementation of Dispatch No. 59 in 2000 by the General Office of State Council and the framing of the SME Promotion Act, the State Economic and Trade Commission carried out studies about the SME standards that suit the Chinese condition as well as the real demand of enterprises.

The new criteria will be determined based upon the number of staffs, sales value, total asset amount, as well as the characteristics of the industry. The new criteria also take into consideration the contribution of SME to employment as well as the input and output of SME. The new criteria will follow the following principles: First of all is the trueness. The new criteria intend to be consistent with the demand of the socialist market economy and truly reflect the size of SME in market competition and its contribution to social employment. Second is the universality. Except for a few special industries like the financial industry, the new criteria will cover most industries in the national economy, with different ownership and organizational structures. Third is the maneuverability. The criteria should be designed in a simple and straight and maneuverable manner. Fourth is the comparability. The selection of indicator and the establishment of the new criteria should suit the Chinese condition and real circumstances of enterprises, and also have comp ratability internationally. The new criteria are expected to go into effect after the issuing of the SME Promotion Act.

4.Continuing to strengthen the building of management institutions and further improve the working system.
Based on the requirements of Dispatch No. 59 in 2000 by the General Office of State Council, the local governments have, together with institutional restructuring, set up SME management institutions and further improved our working system characterized by vertical links and horizontal cooperation. A great number of provinces and cities have gradually establish the leading group responsible for the promotion of SME development, and set up SME departments in the Economic and Trade Commissions to be in charge of the regional business affairs. In order to enhance the activities concerning SME, some provinces and cities have turned the SME Departments to SME Bureaus. Furthermore, the functions and priorities of the former township enterprises management agencies have been shifted to small and medium-sized enterprises.

Links

  Reform Situation of Small and Medium-sized Enterprises

  The Construction of Service System for Small and Medium-sized Enterprises

   Information Reforms on Small and Medium-sized Enterprises