The Chinese government is working to set up a development fund for small and medium enterprises to help them resolve their financing problems, Vice Premier Zeng Peiyan said.

While encouraging such businesses to list on stock markets overseas, the central government is attempting to help them widen their financing channels, the vice premier said at a China-US forum on businesses and venture capital, which opened in Beijing Wednesday.

Additional efforts will be made to push for introduction of venture capital, he said.

Although small and medium-sized enterprises have become an important force propelling the nation's economic growth and job opportunities, they have suffered financing headaches that constitute development bottlenecks.

National Development and Reform Commission statistics indicate 99 percent of Chinese enterprises are fall into the category, and absorb 75 percent of the nation's labor forces, while creating more than 55 percent of the nation's gross domestic product.

However, due to various factors such as policy barriers, banking regulations and unhealthy financial systems, such businesses often find it difficult to raise capital.

Tax policies have been exercised to encourage various investment agencies to increase their capital, Zeng said.

Special capital has been arranged and an innovation fund for high-tech companies has been set up.

A board was launched at the Shenzhen Stock Exchange last month and has witnessed a rage of initial public offerings.

US Secretary of Commerce Donald Evans highlighted the government's role in promoting the development of small and medium-sized enterprises at the opening ceremonies of the forum, saying government should endeavor to create an open, transparent and competitive environment.

(China Daily June 24, 2004)