A statement released after an executive meeting of the State Council, China's Cabinet, on Wednesday said that small, medium, and micro-sized enterprises as well as the self-employed face huge difficulties, and it called for more financial support for them via the market.

That statement hits the nail on the head. It is undeniable that the COVID-19 pandemic, which has already lasted two years, has dealt a heavy blow to the economy. SMEs, micro enterprises and the self-employed are finding it hard to run their businesses.

Data show that the number of SMEs, micro enterprises and self-employed in the country exceed 120 million, accounting for 80 percent of the total 150 million market entities. Yet their development index in November, as released by the China Association of Small and Medium-Sized Enterprises (CASME), is still quite low.

They face many problems. For example, they have difficulties in funding because the banks prefer to provide loans at preferential rates to big businesses rather than to small companies. Besides, the financial market is still incomplete and lacks a proper comprehensive system for loans backed by pledged goods or financing guarantees.

The State Council executive meeting has accurately identified these problems, saying it is particularly necessary to customize financial support policies for small, medium-sized and micro enterprises and the self-employed.

It has called for new tax reductions and fee reductions, and financial support for small, medium-sized and micro enterprises as well as the self-employed to help them overcome the difficulties and uncertainties. Financing support for the real economy will be increased so that financial institutions can issue special financial bonds to help small and micro enterprises and a national network of financing platforms will be established. The evaluation of financial institutions' performance will include the loans issued to small businesses.

When all these policies are implemented, the financial environment for SMEs, micro enterprises and the self-employed will improve significantly. There used to be a report that financial institutions neither dare to nor are willing to issue loans to smaller enterprises because of the high risks. That situation will be fundamentally reversed with the new policy, and SMEs, micro enterprises and the self-employed which account for 80 percent of all market entities will have their pressure for development relieved.