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By Yin Lei

Shanghai issued a series of new measures on Nov. 3 to shore up the development of private enterprises in the municipality with financial support, lower costs and a more favorable business environment.

These measures, announced just two days after Chinese President Xi Jinping stressed unswerving support for the non-public sector, offer generous financial backing for public companies and small and medium-sized enterprises (SMEs) in Shanghai.

The municipality will set up a 10-billion-yuan fund (1.45 billion U.S. dollars) to help listed companies through difficulties that enjoy a bright development prospect and fit with China's economic transformation, particularly industry leaders, big employers and innovative players.

These measures give high-performance SMEs in Shanghai access to 10 billion yuan (1.45 billion U.S. dollars) of loans, either secured or unsecured. The municipality also raises its loan guarantee fund to 10 billion yuan, covering SMEs as well as medium and large private businesses. The introduction of a special relief fund is being considered by the Shanghai government.

Lowering various costs is another focus in the measures put forward by Shanghai for the private sector, which will adjust tax rates to the lowest levels permitted by law, cut the rent of land and offices, reduce social security contribution ratios and minimize institutional costs.

These measures highlight a more favorable business environment for private businesses, giving them access to more sectors and a certain minimum share in government procurement orders. The execution of policies will be further improved. 

Private companies in Shanghai will receive more government support as they pursue mergers and acquisitions, upgrade their technologies, advance innovations, train talents and venture abroad.

The private sector has been an indispensable part of Shanghai's development, contributing to a quarter of its economy, 70 percent of local new jobs and over a third of its tax revenues. From January to June of 2018, 96.4 percent of newly-founded companies belonged to this sector.