Tax Relief and Financing Support: China’s Small Printing Enterprises Gain Policy Momentum

A defining feature of China’s printing sector is the large number and wide distribution of SMEs; yet this structure has also constrained the industry’s move to a higher level. To advance the transition from a big printing country to a strong printing nation, removing the development bottlenecks of SMEs has become a priority. China therefore issued the Implementation Opinions on Financial Support for the Development of Small and Micro Enterprises to ease financing pressure on small and medium-sized printing enterprises.

Recently, the member of the Standing Committee of the Political Bureau of the CPC Central Committee, Premier of the State Council and Secretary of the Party Leadership Group visited Lanzhou Huayu Packaging Color Printing Company to examine small and micro enterprise development. During the visit, he asked detailed questions about business performance, employee income, whether loans were difficult to obtain and whether unreasonable fees existed.

Statistical research from abroad indicates that SMEs are an important vehicle for employment and a major force in tackling job creation. To truly address employment challenges, it is necessary to vigorously develop SMEs. He also said: “Tens of thousands of small, medium and micro enterprises are the main absorbers of employment, and supporting their development is creating jobs in society. When small and micro enterprises develop well, employees can increase their income and society can add wealth.”

In effect, this visit to a printing enterprise sent a clearer positive signal to China’s small and micro businesses, especially small and medium-sized printing companies. Looking back at domestic policy trends over the past six months, it is evident that this favorable momentum has been steadily strengthening.

On July 24, the Premier of the State Council chaired an executive meeting of the State Council, which decided to further level the tax burden and temporarily exempt certain small and micro enterprises from VAT and business tax. Small and micro enterprises with monthly sales of no more than 20,000 yuan will be exempt from VAT and business tax.

China has a huge number of small and micro enterprises, most of them private. By adjusting the expenditure structure to activate idle fiscal funds and following the principle of fair tax burden, starting August 1 this year, small and micro enterprises that are small-scale VAT taxpayers or business tax payers with monthly sales of no more than 20,000 yuan will be temporarily exempt from VAT and business tax, with related long-term mechanisms to be studied. Eligible small and micro enterprises will enjoy the same tax policies as self-employed individuals; more than 6 million small and micro enterprises will benefit, directly affecting the employment and income of tens of millions of people.

On August 12, the General Office of the State Council issued the Implementation Opinions on Financial Support for the Development of Small and Micro Enterprises. The document stresses that small and micro enterprises are a vital force in national economic development and play a prominent role in stabilizing growth, expanding employment, promoting innovation, prospering the market and meeting people’s needs. Strengthening financial services for small and micro enterprises is an important part of using finance to support the real economy, stabilize employment and encourage entrepreneurship; it bears on the overall economic and social development and carries strategic significance.

At the same time, the Opinions set specific requirements in eight areas for financial support to small and micro enterprises: ensuring the “two no less than” targets for the growth rate and increment of loans to small and micro enterprises; accelerating the enrichment and innovation of financial services for them; strengthening credit enhancement and information services; actively developing small financial institutions; vigorously expanding direct financing channels; effectively reducing financing costs; increasing policy support for financial services to small and micro enterprises; and comprehensively building a sound environment for small and micro finance.

The Implementation Opinions on Financial Support for the Development of Small and Micro Enterprises focuses on the financing problems that commonly trouble small and micro enterprises, such as weak capital chains and difficulty obtaining financing. Beyond funding, small, medium and micro enterprises also face inadequate management systems, weak risk resilience, recruitment difficulties and an incomplete socialized service system. These challenges are especially visible in China’s printing industry, which is dominated by small and micro enterprises.

Today, as reform and opening up deepen, the printing industry continues to expand, with total printing output value accounting for about 2% of GDP. In the national layout of printing enterprises, more than 96% of the 180,000 companies are small and medium-sized enterprises. Printing companies go through multiple processes from prepress to postpress packaging and shipment, requiring a large labor force. As one link in the product processing chain, most printing enterprises find it hard to build an independent brand and market competitiveness. While bearing the common problems of small and micro enterprises, traditional printing companies must also confront new technologies, new marketing models and industrial transformation and upgrading in the information age. Therefore, policy support and favorable conditions are particularly important for small and micro printing enterprises.

The development of small and micro enterprises requires not only government support in finance and fiscal policy, but also intermediary services from social organizations in education and training, management consulting, marketing, technology development and legal assistance. The government should intensify efforts against unfair competition, regulate market order and actively use its advantages to create more development and cooperation opportunities for SMEs, placing the supporting industrial chains of large enterprises with local SMEs as much as possible. It should also use the information it obtains to help SMEs identify new market entry points.

—This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-361884.html