SMEs are a new force for the economic and social development of Jilin province. In recent years, the state and the province have rolled out a slew of policies and measures to solve financing difficulties, to cut costs and reduce corporate burdens, to promote the development of startup and innovation and to protect the legitimate rights and interests of SMEs.
Promotion regulation to solve difficult problems in development of SMEs
The Regulation of Jilin Province on Promoting the Development of Small and Medium-sized Enterprises is the first legal text issued by the province to promote the development of SMEs, which is divided into 10 chapters with 60 clauses. The regulation not only pays attention to solving the current prominent problems, but also focuses on the long-term legal guarantee, tackling various difficulties in development of SMEs in a multi-dimensional way.
The regulation has relevant clauses on setting up special funds, strengthening private capital cooperation, improving the financing environment, establishing a consultation mechanism and promoting financial innovation. It encourages SMEs to participate in the public-private partnership (PPP) projects, encourages and guides financial institutions to promote the adjustment of credit agencies and the innovation of credit products and to increase credit support for micro and small-sized enterprises. According to the regulation, a sound tripartite mechanism for consultation should be established among local governments, financial institutions and SMEs, the cooperation between enterprises and financial institutions should be improved, and a preferential system of bank credit should be built for major government investment projects of SMEs.
The regulation has specific clauses on cutting taxes and fees, reducing financing costs and promoting lean management. It implements preferential policies like tax and fee cuts, streamlines tax administration procedures and reduces tax burdens. It also encourages financing guarantee agencies to lower the guarantee fee rates for SMEs to reduce their financing costs, encourages and guides SMEs to establish a modern enterprise system and to carry out lean management.
The regulation has specific clauses on coordinated innovation, intelligent manufacturing, brand leading and integrated central-local development. It encourages universities, scientific research institutes and large key enterprises to jointly set up platforms for coordinated innovation, encourages and guides SMEs to use the new generation of information technology like artificial intelligence to improve their capabilities in intelligent manufacturing, green manufacturing, lean manufacturing and service-oriented manufacturing, encourages SMEs to develop and apply technologies and products with their own independent intellectual property, encourages SMEs to participate in the R&D of common key technologies, as well as the implementation of national scientific research projects, encourages and guides the integrated development between SMEs and enterprises directly under the central government. In addition, the regulation has specific clauses on startup services, startup of special groups and the establishment of startup bases.
The regulation has specific clauses on overdue payments, inspection related to enterprises and business credit. According to the regulation, government departments and large enterprises should not default on payments of goods, projects and services owed to SMEs, oversight conducted through the random selection of both inspectors and inspection targets and the prompt release of results should be implemented for SMEs, and a binding mechanism for honoring government agreements should be established to protect the legitimate rights and interests of SMEs.
Payment regulation to safeguard the legitimate rights and interests of SMEs
On September 1, the Regulation on Ensuring Payments to Small and Medium-sized Enterprises officially went into effect to ensure timely payments to SMEs in accordance with the law.
The regulation mainly applies to contracts signing between government departments, pubic institutions & large enterprises and SMEs, requiring them to pay for goods, projects and services from SMEs on time, not to debts due to loans, investments, financial transactions, etc. It applies to contracts with SMEs as the payee, not to contracts with SMEs as the payer. It does not apply to transactions between large enterprises and between small enterprises, either.
For government departments and public institutions that procure goods, projects and services from SMEs, payments should be made within 30 days, or at most within 60 days if otherwise specified in the contract, upon the delivery date. For large enterprises carrying out similar dealings, the payment period should be reasonably set and comply with industry practices and trading habits, with a requirement of on-time payments. If contracts adopt flexible billing options such as progress billing and regular billing, payment terms shall start from the date on which both parties confirm the settlement amount.
The regulation specifies the requirements for inspection and acceptance and requires government departments, public institutions and large enterprises to make an agreement with SMEs on taking qualified inspection and acceptance as the payment condition, with the payment period starting from the date of passing the inspection and acceptance. Both parties to a contract shall set a specific and reasonable deadline for inspection and acceptance and complete within such time limit. For delayed inspection and acceptance, the payment period shall start from the date of expiration of the agreed inspection and acceptance period.
In terms of overdue payments, the regulation prohibits disguised arrears, standardizes deposit collection and settlement and clarifies the liability for delaying payments. In addition, it makes clear provisions on information disclosure, complaint handling and government supervision.
Two types of special funds to support enterprise projects
Making good use of the special funds established by governments at all levels for industrial development can support the promotion of SME projects. The Provincial Department of Industry and Information Technology and the Provincial Department of Finance set up two types of special funds at the provincial level to develop key industries and SMEs & the private sector respectively.
This year, the provincial special fund for the development of key industries is spent on promoting automobile consumption, supporting the technological transformation of key anti-epidemic material manufacturers, boosting industrial internet construction and service-oriented demonstration projects of the manufacturing industry and supporting the capacity and scale expansion of enterprises and the supply of production factors. The provincial special fund for the development of SMEs and the private sector is spent on loan interest subsidies for little tech giants, construction of startup bases, as well as startup and innovation services, market development, service system training, skilled personnel training and management personnel training for SMEs.