SHENZHEN began to meet its commitment to support the development of the private economy Thursday when a government-backed strategic cooperation agreement was signed to help finance private enterprises and ease their difficulties in getting loans.

The agreement, which was clinched between Shenzhen High-tech Investment Group Co. Ltd., a State-owned enterprise under the Shenzhen government, and four banks, financial institutions and securities brokerages at Wuzhou Guest House, committed support for the issuance of bonds worth more than 50 billion yuan (US$7.4 billion) by 100-strong local private enterprises.

It is believed to be an important move to improve Shenzhen’s investment environment and competitiveness.

Fourteen private companies in the city were announced as the first batch of beneficiaries at Thursday’s ceremony.

Li Li, chairman of Shenzhen Hepalink Pharmaceutical Group Co. Ltd., a listed company, said he was happy that his company was included in the list and he was encouraged by the city government’s resolution to bolster the private sector and advance its dynamism.

Last December, Shenzhen rolled out a slew of new measures to boost the private economy, pledging that it would perfect supporting policies to help more private firms solve financing problems.

Under the measures, the city aims to reduce costs for private enterprises by at least 100 billion yuan and increase bank loans by 100 billion yuan to ease the difficulties of small and micro enterprises in obtaining bank loans.

The city also promises to expand the amount in the capital pool set up by the government to mitigate the risks of banks in extending loans to small and micro enterprises from the current 2 billion yuan to 5 billion yuan, and the beneficiaries will also be expanded to cover self-employed small business owners.

The city will facilitate the issuance of bonds by private enterprises worth a total of 100 billion yuan and set up a 100-billion-yuan fund to help ease liquidity risks for publicly traded firms that have pledged shares as collateral for loans.

The city aims to encourage 1,000 small and micro industrial enterprises to grow into enterprises above a designated size by granting a 100,000-yuan reward to each enterprise that qualifies.

By the end of last October, the number of business entities in Shenzhen had reached 3.07 million, an increase of 3.2 percent over the previous year, according to the city’s economic trade commission.

Small and medium-sized firms make up the majority of Chinese companies and are major employers but have traditionally faced difficulties in getting bank loans.

The Central Government has made it a priority to ease financing difficulties for small and private enterprises. A State Council executive meeting in August decided to encourage financial institutions to increase loans for small and micro enterprises, and reduce their financing costs.

Private businesses contribute more than 50 percent of China’s overall taxes, more than 60 percent of its GDP, more than 70 percent of technological innovation and more than 80 percent of urban employment, according to Vice Premier Liu He last year.(SD News)