Small businesses to brighten China's economic prospects

If one-man operations are taken into account, the number quintuples and the ratio tops 94 percent, according to the State Administration for Industry and Commerce.

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Despite limited revenue and volatile profits, those firms contributed 60 percent of GDP and paid half of the nation's tax bill. Over 70 percent of new jobs are provided by them.

Tang Jianwei, senior analyst with the Bank of Communications, considers government support appropriate and necessary in current circumstances.

Echoing his words, Bai Jingming, vice-director of the Research Institute for Fiscal Science under the Ministry of Finance, said the recent measures will help companies become more confident, create jobs and stabilize growth.

As the foundation of China's real economy, these enterprises play irreplaceable role in economic advance, technological innovation and social stability, said Miao Wei, China's Minister of Industry and Information Technology.

Small firms in China still face a bumpy ride. Financing costs and taxes can not be eliminated once and for all and labor costs keep rising.

Tang wants the central government to be more bold in cutting taxes and in financial support to truly help the small firms that have borne the brunt of the economic downturn. A bank focused on loans to small firms should be established to provide liquidity for small but important market players, he said.