Support The Development Of Smes In China's Fiscal Policy

Small and Medium-sized Enterprises (SMEs) is an important part of the national economy, playing a strategic role in every country' development including China. Economists from all countries have a common idea that SMEs will be the main force of economic development in 21 century. SMEs play a more prominent and important role in China, which is the largest developing country. By 2009, there have been 10.42 million SMEs registered, taking up 99% of the total number of Chinese enterprises. And the output of SMEs occupied more than 60% of the GDP and its tax payment covered more than 50% tax revenue. In addition, SMEs offer more than 75% of total employment opportunities in the urban and rural. To enhance China's economic growth energy, to broaden the employment opportunities, to maintain social harmony and stability and to build the innovative country, we must devote major efforts to develop SMEs, and this has important strategic significance.However, judging from the development of the world economy, we can see SMEs have exposed some deep problems in the developing process. The outstanding problems are the backward technical level, the low labor productivity, the lack of capacity of competition, and the hindered financing channel, etc. These problems have brought SMEs certain difficulties for their sustainable development. In view of the small and medium-sized enterprises face the realistic environment, since 1990s, with international economic integration and new deepening economic revolution, the developed countries were actively supporting the development of SMEs. A lot of government officials, economists, and management experts are paying more attention to SMEs and taking this up to strategic degree. Governments are adopting different fiscal policies to support and promote their growth and development of SMEs.China is paying attention to the reform and development of SMEs in nearly ten years. In June 2002, in order to improve management environment of SMEs, to promote their healthy development, to increase employment rate, and to give free rein to SMEs to play the important role in the national economic and social development, China has formulated and promulgated the SMEs promotion law, which went into effect in January 2003. It is a special law to support and promote SMEs, making specific provision about capital supports, entrepreneurship supports, technology innovation, market development and social services. Meanwhile, appropriate fiscal and tax policies and suitable measures are taken to support the development of SMEs, which do have a long-term effect.However, because of the own factors and the external environment such as "market failure", SMEs have many restraints in the growth and development. Besides, our public fiscal policies to support SMEs are not perfect, and there are few researches of public fiscal policy system for SMEs in the domestic related studies. So to study and to explore the development regularity of SMEs and to publish public financial policies to promote their healthy growth will both have certain theoretical and realistic significance in the new stage of development.As the governments'economic policy to support and guide the development of SMEs, public fiscal policy is an important safeguard of the healthy and stable development of SMEs. Nowadays, it has become a significant subject of theory research that how to use fiscal and tax measures to promote the healthy development of SMEs.While focusing on the financial policies which are for supporting of the development of SMEs, and on the framework of research related to the motives, backgrounds, policy orientations and the path selections of such support, the full text discusses how to promote the development of SMEs throughout each chapter. By comprehensive use of the fiscal and tax theory, qualitative analysis and quantitative analysis, international experience and national conditions, and by combining data, graphics, forms, and cases, we manage to integrating theory with practice, so as to analyze and solve the problems.Within this framework, the paper analyzes these viewpoints such as:Developing SMEs in China has a important role to optimize the industrial structure and to promote employment; SMEs will take an important strategic position in China's national economy; Government play a guiding role in the promotion of SMEs; And it is necessary to take the fiscal policy to support SMEs. By reviewing and analyzing the related policies, this paper analyzes the present situation, developing tendency, developing opportunity and the main obstacle of Chinese SMEs. Besides, we draw lessons from international fiscal policy experience, considering with China's specific conditions. Then basing on the main barriers in the developing process of SMEs and the existing problems of fiscal policy, we puts forward suggestions of how to perfect the fiscal policy system to support the development of SMEs.Through our analysis, we make the conclusion that in order to construct and improve fiscal policy system for SMEs in China we should take measures from the following aspects:First, construct the financial support system for SMEs:Increase the financial investment and fiscal payment to SMEs; Construct and perfect the development fund for SMEs; Increased the finance allowance to technological innovation; Support the establishment of policy credit guarantee and banks with SMEs oriented policies; Provide finance for SMEs and consummate the supporting effect of governments'purchases.Second, perfect the tax support system for SMEs:According to the main obstacle of the development of SMEs and the characteristics of each respect of industry, go a step further to improving and optimizing the tax policy for SMEs, such as the present value added taxes and the income taxes.Finally, in addition to building fiscal policy system for SMEs, other supporting policies for SMEs need to be taken. Under the coordination mechanism of the fiscal policy system and the related supplementary policies, they will produce joint effect, and jointly promote the development of SMEs in China.This paper tries to research how to promote the development of SMEs from a new perspective of fiscal policies'support of SMEs in China, at the same time, we put forward viewpoint of how to adjust standard definition of SMEs, and then analyze the promotion role of financial policies for SMEs. Based on the foreign advanced experience, and combining with China's specific national conditions, the paper have proposed suggestions about how to construct and perfect the fiscal policy system to support SMEs. This provides a theoretical guide for consummating the existing fiscal policy system for SMEs, which makes these suggestion have a practical value when they are referred to.