国内英语新闻:China's cash-strapped small firms ring alarm bells

To address the small businesses' financing need, Chinese Premier Wen Jiabao paid a visit to Zhejiang province on Oct. 3 and Oct. 4.

Premier Wen said small enterprises should be a priority for bank credit support and enjoy more preferential tax policies.

Banks should increase their tolerance for the non-performing loan (NPL) ratios of small enterprises, set targets for the proportion and growth of loans to small companies and reduce the cost of securing credit, the premier said.

He also said bank support for small businesses must follow market principles and avoid too much administrative intervention in order to check moral hazards.

Wen said private lending activities should be better guided and regulated in order to play a positive role in boosting the country's economy.

"Effective measures should be taken to contain the trend of usury, crack down on illegal fundraising and properly handle the problems of collateral and capital shortage in order to prevent risks from spreading and evolving on a regional scale," he said.

"Small businesses play an irreplaceable role in creating jobs and boosting economic growth," said Wen.

"It is of overall and strategic significance to support their development," Wen added.