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By Ma Yuan, Research Team on “The Development Environment of Small and Medium-Sized Businesses”, Enterprise Research Institute, DRC

Research Report, No.22, 2019 (Total 5522) 2019-2-28

Abstract: Small and micro businesses are the main driving forces of China’s economic development, the main channels to provide employment opportunities and the major entities to make innovations. However, problems such as unsustainable development, poor transmission of information, unregulated financial management, unsound governance and weak ability to counter risks are still troubling these businesses. In recent years, the government has attached great importance to the development of small and micro businesses and introduced a sea of preferential policies to bolster the development of these businesses. Survey results collected from more than 50 small and micro businesses in Shaanxi and Gansu provinces show that these businesses have begun to enjoy benefits brought about by the government policies, whereas many businesses reveal that they have not obtained a stronger sense of gains. That indicates that greater efforts are required to put in place the government policies in a more targeted manner. Therefore, the following policy options are proposed for the improvement of government work. By taking a long term development perspective, relevant sectors of the government need to develop basic systems supporting small and micro businesses, encourage them to get involved in related policy-making procedures and create a business environment featured by equal rights, opportunities and rules. In light of the current core demands of small and micro businesses, policy measures need to focus on improving the financial support and transmission mechanisms as well as motivations for financial service innovation and implementing more inclusive tax cuts. More efforts are required to reduce rates of social security fees, alleviate social security burden, further optimize business environment and make the supporting policies become more targeted, accessible and effective.

Key words: small and micro businesses, tax and fee reduction, business environment, targeted policies