By Zhang Shidong
Nov. 15 (Bloomberg) -- China's Premier Wen Jiabao pledged more funding and fiscal support for small and medium-sized enterprises to help them weather the slowdown in the domestic and global economy.
Banks should make it easier for small companies to get loans and the central government will set aside more money to help businesses upgrade their technology, Wen said during a two-day visit to factories in southern Guangdong province, according to a statement on the government's Web site today.
China faces a ``formidable challenge'' to prevent a slump in the world's fourth-biggest economy, top planning official Mu Hong said yesterday. The government on Nov. 9 announced a 4 trillion yuan ($586 billion) stimulus package after slowing exports and falling output signaled a deepening slowdown.
``Support for the healthy development of small and medium-size companies is of great significance to promote economic growth, increase fiscal revenue, expand urban employment and maintain social stability,'' Wen said. ``I have come to the Pearl River Delta to boost morale. If we give top priority to development we will be able to overcome difficulties.''
China's central bank last month urged the nation's banks to create new credit products and financial services for small and medium-sized businesses and boost lending to the segment. Yi Gang, vice governor of the People's Bank of China, said yesterday that new services would ``largely address'' the funding difficulties faced by many small businesses.
Export Slump
Thousands of workers have lost their jobs in Guangdong this year as export orders have slumped. Smart Union Group (Holdings) Ltd., a toymaker that supplies Mattel Inc. and Hasbro Inc. shut last month, laying off 7,000 people in Dongguan city.
A quarter of Hong Kong-owned businesses in the Pearl River Delta manufacturing hub in Guangdong may go bankrupt as a result of the global financial crisis, Clement Chen, chairman of the Federation of Hong Kong Industries, said in an Oct. 20 interview.
Guangdong province was the biggest contributor to China's economy last year, accounting for 12.4 percent of gross domestic product and nearly a third of the nation's $1.2 trillion of exports, government statistics show. Half the nation's toy exporters have closed this year, and 67,000 smaller enterprises filed for bankruptcy in the first half, according to government statistics.
Wen visited factories in Guangzhou, Shenzhen, Dongguan and Foshan, including Shenzhen Hangsheng Electronics Co., an auto electronic products maker, and Galanz Group, the world's biggest microwave oven producer, the statement said.
He urged companies to bring out new products, improve the quality of their goods and improve their competitiveness to help them survive the global economic turbulence.
``In the face of the international financial crisis, we need to develop a contingency plan, map out long-term development strategies and turn crises into opportunities,'' he said.
To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net
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