Prime Minister Lee’s encouraging of the overlays on "two small” really means kick in the door
March 26, when Premier Li Keqiang inspected Shenyang Hua Han small loan company, creatively brought in superposition theorem, he said: the microfinance service for the small enterprises," two small" harmony superposition will be able to make a great career. His easy words made us thinking and our resonance also made much hope to the small enterprises a large “vulnerable” group.
Prime emphasizes on the small and micro enterprises so much, because they are small and micro but power. He said: Thousands of mid and small enterprises are main disk haler of employment, to support their development for jobs. Good development of them means rising employees income and social wealth. For this reason, in recent years, the state has issued a series of policies to support small and micro enterprise development. Since August 1, 2013,the small-scale taxpayers and business taxpayers in the small and micro enterprises which the monthly sales is lower than 2 million VAT have been tentatively exempt from VAT and sales tax, which means the qualified small and micro enterprises can enjoy the same tax policy with the individual businesses, which has brought boon for 600 million small and micro enterprises to subtract their burdens. March in 2013, China Banking Regulatory Commission issued the opinions on deepening the financial services of the small and micro enterprises, urging the Commercial Banks to continuously strengthen the "six systems" construction of their financial services, following the "four single principle” to mainly support the sustainable operation of them with the consoling national industrial and environmental policies, with markets, with needs. To actively encourage and guide the Commercial Banks to play the outlets, human and technological advantages, the supervision departments must be productive in promoting the small and micro enterprises to improve the efficiency of financial services, credit availability, coverage of financial services, practice of social responsibility, and optimizing the financing environment. The financial sector and the real economy are like the relationship between fish and water, which can do without each other. August in 2013, the promulgation and practice of “eight pieces of our country” no doubt offers a “cardio tonic” to the small and micro enterprises benign development, as well as play a changing and promoting role of broadening their development ideas and their financing channels.
Arguably, the development of the small and micro enterprises should go very smoothly with the attention of Premier and the lean of the policy. Then why so Premier does? Is it the perfect match?
Although, the small and micro enterprises as the market economy "booster" has been attached the great importance to the central, the local governments and Banking Regulatory Department and they also have the support of a series of supportive policies, in reality, they are still marching with reel. It’s the enduring topic for all levels of the Two Sessions for many years that it’s very difficult and expensive for the financing of the small and micro business. The reason that the writer observed for its interest what the Commercial Bank did only was “shame and vanity project” and always with blind greed. As everyone knows the way of “no large without smallness”“The ground would climb the ladder”,the high threshold designed by the National Commercial Bank made the small and micro businesses stop with fear which is quite different with the expectations of our country and the small and micro enterprises, which also was said for the risk control of the international standards.
Now a large number of the high-quality small and micro enterprises get their temporary working capital loan from the small loan companies and the other private financial institutions, once all of which were found by some big state-owned banks, the banks would refuse and pressure loans by simply thinking as potential risk. This does not meet the existing conditions of our country and Premier Lee has certainly observed the truth. His visit to the small companies didn’t only showed his recognition and attention to the role of them, but also cautioned the state-owned commercial banks: If you don’t act, the people of the superposition of small two can make a great progress.
The microfinance companies as the private financial institutions which support the development process of the small and micro enterprises at this stage play a very important role, also an important part of the integral development of market economy, the Commercial Banks and the Informal Finance should developed and replenish each other in order to truly create a prosperous and flourishing financial market situation.
For this reason, the writer recommends:
First, the large state-owned banks have to accord to Prime Minister Lee's instructions to play the style of the big ones and undertake social responsibility, to make actively and quickly practical policy approaches of the support of the small and micro enterprises according to their much difficulty that they have no enough collateral, sound and symmetrical information mechanism, to innovate and broaden the financing channels for them.
Second, the Banking sectors would help the financial sectors with changing their concepts, properly treating and thinking the risk of small and micro enterprises. Under the premise of the laws and regulations, the tolerance, exemption and due diligence for the performing loan ratio of them should be relaxed. For actively encouraging the financial sectors to work. the indicators the development of small and micro enterprises should be thought as one of the important conditions for the bank executives at all levels.
Third, the government should strengthen the communication and coordination of various departments and give more policy supports of the financial subsidies, tax breaks, establishing the risk-sharing mechanism and writing off bad loans.
Fourth, the taxation and financial sectors should cooperate each other to carry out the action plan of “three supports & one help”(to support the strength, the superior, and the smallness and help the puniness),to create a favorable financial and zoology environment and the survival and operating environment for the small and micro enterprises in the whole society so that to settle radically their problems and promote their sustainable development and industrial upgrading and economic restructuring,“the small and micro enterprises make great business”will come true soon.
So, Prime Minister Lee encouraged "two small" to overlay, the tigers can not stand idly by. The government, the state-owned Commercial Banks, the CBRC, the financial and taxation sectors to work together in order to make more obvious superimposed efficiency, requires all parties to build a large and great utilities.
