China to incentivize small firms

China's central bank will continue to implement prudent monetary policies and increase financial incentives for small firms, said its chief, Zhou Xiaochuan, on Monday. Zhou said at a conference on improving the financial environment for small firms that China will provide financial support to small firms as part of efforts to sustain stable economic growth. Small and micro-sized firms serve as a significant channel for creating jobs, a major platform for the growth of entrepreneurship, and an important force of scientific innovation, according to Zhou. "Financial support to small firms' development will lead to a stable and relatively fast economic growth," said the official at the conference. Zhou said China will keep a reasonable credit supply to provide a good financial environment for small and micro-sized firms, while lending to such enterprises should grow at a rate no lower than the average loan growth of the country's banks. China will steadily push forward market-oriented interest-rate reform and the establishment of a deposit insurance system, he stressed. Official data showed that small and micro-sized enterprises create about 80 percent of the country's jobs, but they usually have difficulty in securing bank loans, as Chinese banks prefer to lend to larger companies, especially state-owned enterprises.