China's financial hub Shanghai said late on Saturday it will allocate 30 billion yuan ($4.35 billion) in funding to support the private sector, amid growing concerns about the country's slowing economy. The move comes after Chinese President Xi Jinping last week pledged more tax cuts and financial aid for struggling private firms.
Shanghai said it will put 10 billion yuan into a fund aimed at boosting liquidity in listed companies. The fund would target firms in emerging industries or other areas that meet Beijing's goal of shifting the economy to higher value added products. Another 10 billion yuan will go towards encouraging lenders to expand credit to small and medium-sized firms, and the rest of the money is aimed at increasing guarantees for financing for SMEs, it said.
A document posted on the government's website on Sunday said it will also seek to reduce costs for businesses and implement tax incentives to support growth. Private companies account for more than 80 percent of the city's firms, said a Xinhua report, and contribute more than one-third of Shanghai's tax revenue.
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