BEIJING, (Reuters) – China’s Cabinet Monday said that it will increase financing support for small business owners who are being affected by rising raw material prices and power shortages.

Since the beginning of last year, Chinese officials have revealed a series of policies to help small businesses. These are crucial for job growth and economic development but have been more severely affected by COVID-19.

Cabinet stated, “Recently costs of small-and medium-sized companies have risen, and difficulties in them operating have intensified,” pointing out rising raw materials prices, weak orders, and high logistics costs.

According to it, local authorities will provide assistance funds for small companies that are temporarily in difficulty but still have potential for long-term growth, as well as tax breaks for those firms.

It stated that the central bank will increase credit support for small businesses and make good use of annual relendingquotas.

China plans to increase funding support for small companies by increasing the annual relendingquotas by 300 Billion Yuan (or $47 billion), as announced by the Cabinet in September.

China will take action against illegal hoarding or speculating in commodities prices. Futures companies can help small companies hedge the risks of sharp price swings, according to the cabinet.

($1 = 6.3813 renminbi)