Special financial platform to support SMEs

Currently in China, the private economy is an indispensable force behind the country's development. Private companies contribute 60 percent of China's GDP, and are responsible for 70 percent of innovation, 80 percent of urban employment and provide 90 percent of new jobs.

Since the contagion outbreak, China has launched a series of measures to support SMEs. In July, the ministry, together with other 16 ministries, launched a guideline to improve supportive rules for SMEs.

The measures included improving the incentive and exit mechanism of venture capital firms and guiding angel investors, private equity and venture capital investors to expand equity financing of SMEs. The guideline also called for efforts to support more high-quality SMEs to list on the capital market.

According to the China Association of Small and Medium Enterprises, the SME development index rose 3.5 points to 85.5 in the second quarter. Among the SMEs surveyed, enterprises in the industrial sector had the best performance in work resumption, with a resumption rate of 93.17 percent.

SMEs' confidence has also been boosted. The macroeconomic perception index, which reflects corporate confidence, was now 99.3, an increase of 4 points from the first quarter. The comprehensive business index was 93.7, up 4.5 points from the previous quarter.

"For SMEs, what the National SME Development Fund offers is more than just funds," said Luo Zhuo, founding partner of THG Ventures, a venture capital firm backed by Tsinghua Holdings. "The brand endorsement effect and resources behind the fund may even be as important as the funds themselves."

As one of the sub-fund managing firms, Luo said that the company has striven to maintain close contact with invested companies in talent introduction, research and development cooperation and upstream and downstream connection.

Invispower, a Chinese wireless charging solutions provider, launched its latest electric vehicle charging solutions recently. As the core technology was developed by a group led by Tsinghua University, THG Ventures has played a role in linking the two sides.

In addition, Invispower also set up a new smart manufacturing base in Nantong, Jiangsu province, which is able to produce 4 million wireless charging chipsets per year.

"Compared with common funds, the new national fund places a special focus on key emerging sectors including high-end equipment manufacturing, new energy, new materials and biomedicine, energy conservation, environmental protection and information technology," Luo said.

With more and more private capital pouring in, Xiao Qun－partner of Shenzhen-based Oriental Fortune Capital－added that the total size of the sub-funds is expected to reach 150 billion yuan, and 60 percent of them, representing some 90 billion yuan, will be directly invested in SMEs.