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Wuxi Municipal Government Report on Increased Policy Support for Enterprises and Economic Stability and Growth

Updated : 2014-09-28
(wndonline.gov.cn)

This is an announcement for the government of every city, county, and district, all municipal committees, departments, and bureaus, and institutions directly under the administration of Wuxi government.

In accordance with the Municipal Government's 5th Plenary Session, to implement the decisions of the 12th Municipal Party Congress, to increase support for enterprise development, for the sustained growth of the city's economy, and to guarantee that annual goals are reached, we have formulated the following. I. An increase in investment in industrial projects, with 5 percent of the equipment investment to go to key industrial projects, including technical improvements, costing above 10 million yuan ($1.63 million), with a payment ceiling of 2 million yuan.

II. To encourage new enterprises, 1 percent of registered capital will go to newly established industrial and commercial enterprises with registered capital above 10 million yuan, with a payment ceiling of 2 million yuan.

III. To encourage production and output of enterprises, the same awards as those of late 2011 will be given to the top 100 industrial enterprises by output value increase over 2011; the top 50 trade, commerce and service industrial enterprises by sales; the top 30 export enterprises by export increase; and the top 10 software enterprises by business volume of service outsourcing and business volume of offshore outsourcing; with honorary municipal government titles to go to enterprises that make an outstanding contribution.

IV. To support enterprise market expansion, there will be 50-percent subsidies for the renting of booths for each enterprise taking part in product exhibitions and marketing events, except for the Canton Fair, and subsidies for exporters of export credit insurance for general trade that is up 30 percent.

V. For the promotion and application of new products there will be government policies on purchasing and utilization, and awards instead of subsidies to encourage the development of new products by local enterprises, with high-tech or key new products developed in the city tol be included on the Government Purchasing List, with preference given to those on the list when examined for government purchases.

VI. To encourage the expansion of credit, the government will support banks with favorable conditions provided by regulators, further adjust the credit structure, expand credit investment and scale. Banks that added more than 200 million yuan in loans in the 4th quarter of 2011, there is an award of 0.5 per 10,000 and 1 per 10,000 of the newly loans; and between 0.25 per 10,000 and 0.5 per 10,000 for banks whose off - balance sheet business exceeds 200 million yuan.

VII. To encourage expansion of financial channels, there is support for banks to issue more bonds for enterprises, including SMECN, Collective Bonds, Short-term Commercial, and Medium-term, with awards of 10,000 yuan for banks issuing bonds and notes of up to 50 million yuan; 20,000 yuan for issuing 100 million yuan; and 40,000 yuan for issuing 200 million yuan. Venture capital enterprises in China or abroad are encouraged to increase investment in technological innovation companies, with awards of 20,000 yuan for a project with 5 million yuan in investment; 40,000 yuan for a10 million yuan investment; and 60,000 yuan, for a 20 million yuan project.

VIII. To increase credit support for micro-to-small enterprises, the credit structure will be improved, with greater tolerance of bad loan ratio for micro-to-small enterprises, and greater support for micro-to-small enterprises in credit and loans. There will be an award of from 1 per 10,000 to 2 per 10,000 for banks with loans to micro-to-small enterprises and privately owned enterprises with assets below 5 million yuan, with an upper limit of 50 million yuan.

IX. To reduce the cost of financing enterprises, banks are encouraged to develop a moderate profitability concept, and set reasonable interest rates and pricing, with the highest amount of the Bank Acceptance Bill not exceed 50 percent of the total loan. There are awards of 50,000 and 100,000 yuan for banks whose weighted average interest rate in Q4 is at the same level as for Q3 and whose weighted average interest rate in Q4 is 10 percent below that of Q3 (excluding national interest rate adjustment, and with the weighted average interest rate of Q3 as the benchmark). There is an award of 50,000 yuan for the top 5 financial institutions with an average interest rate of new loans that is the lowest in the city and without illegal charges.

X. To increase financial guarantees, guarantors in the city are encouraged to provide guarantees at a lower rate to industrial enterprises, with an award of 1 percent of the total guarantee for new enterprises in Q4 granted to these companies.

XI. To encourage the development of loan guarantee and credit insurance for micro-to-small enterprises, enterprises are encouraged to buy loan guarantee and credit insurance for these enterprises and to increase operational risk guarantees for them, with 50 percent subsidies for enterprises depending on the insurance premium.

XII. To implement State fiscal and tax support policies for micro-to-small enterprises, the minimum threshold of the VAT and business tax will be raised in accordance with the State Council meeting; the micro-to-small enterprise income tax will be cut by half; national public technology services for SMEs will be included into the list of import duties on articles for scientific and technological development; there will be a stamp tax exemption on loan agreements between financial institutions and micro-to-small enterprises within a 3-year period; the date of the pre-tax reduction policy for SME loan losses of financial institutions will be extended to late 2013; there will be more fiscal support for micro-to-small enterprises; and to maintain the stable development of micro-to-small enterprises through technological loan risk and other subsidies and entrepreneurship investment, there will be reductions, exemptions, or abolishment of charges. XIII. To assure that bank charges are standardized, banks will be encouraged to lower the financial cost of enterprises and standardize charges of financial institutions, and commercial banks are forbidden to charge commitment or fund management fees for micro-to-small enterprises, except for syndicated loans, and they are forbidden from compelling borrowing enterprises to deposit a part of the loan with the lender or compel the borrower to buy financial management products and insurance, and any awards for banks found illegally collecting the abovementioned fees will be withdrawn and the banks will be punished by regulatory departments.

XIV. To improve guidance for enterprises, there will be a three-tier service for them, better liaison between government officials and people in charge of key economic departments and key enterprises and key projects, better coordination in dealing with problems enterprises encounter in development, faster implementation of policies, priority given to the city's key enterprises, and a more perfect "green channel" service system for greater initiative and creativity of enterprises and faster development.

These policies of the Wuxi municipal government will continue and awards will be determined but will not be repeated. The award fund is provided by the municipal and district governments depending on jurisdiction, and the specific amount will be decided in accordance with Wuxi Municipal Governments Opinions on Establishing a Guidance Fund for Promoting the Development of the Key Industries (Xi Zheng Fa (2010) No. 15). The cities of Jiangyin and Yixing can refer to these opinions in implementing the policies. The awards and subsidies apply from Q4 of 2011 to Q1 of 2012. Other support policies will be enacted later.

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