BEIJING, (Reuters) – China will increase support for small business, unveiling financial incentives for banks in local areas to lend to these companies. This was revealed at a State Council meeting presided over by Premier Li Keqiang, on Wednesday.

Chinese authorities began implementing a series of support measures for small businesses in the early part of 2013. These business are crucial to growth and job creation, however, they have been more directly affected by COVID-19.

A new loan repayment relief program for small businesses will be created by the government. The current scheme, which expires at the end of the year, is being transferred to the government. According to the cabinet of the State Council of China, it will give capital to banks to help them lend small business loans.

This new program will be in effect from June 2023 to the beginning of 2022.

The State Council stated that authorities would also increase a relending quota of 400 billion yuan to encourage inclusive financing for small business.

It stated that “at present, small and medium-sized micro businesses and individuals are facing great difficulty.”

To respond to new economic pressures, it is important to concentrate on market entities’ survival and to use market-based support measures for small businesses.

It also stated that the government would increase support for manufacturing companies, giving priority to its tax and fee reduction policy, and allowing them access to longer-term loans.