China will step up fiscal support to small and midsized enterprises to ease their burden and propel high quality growth, the Ministry of Finance said on Thursday.

In a newly released circular, the ministry urged supporting innovative development of SMEs, and asked localities to promptly allocate the special funds received from the ministry to new "little giant" enterprises that are entitled to them.

Through allocation of the funds, local branches are expected to guide SMEs to increase investment into innovation, enhance upstream-downstream cooperation and accelerate digital and intelligent transformation.

The ministry will also select some cities as pilot regions for promoting digitalization of SMEs and will set aside special funds to award achievements.

The ministry has also decided to strengthen measures that encourage SMEs to provide products and services to the government to expand SMEs' share in the public procurement market.

The policy of increasing the SME share for contacts of engineering projects worth above 4 million yuan ($550,000) each from more than 30 percent to more than 40 percent will be extended until the end of 2025.

SMEs will also be further encouraged to take part in government procurement activities, through measures including promoting digitalization of the procurement process and supporting SMEs to carry out procurement contract financing.

To support SME to expand employment, the ministry said it will provide funds for micro, small and midsized enterprises that sign employment contracts of more than one year with special groups of young people, including fresh graduates and those who graduated less than two years ago but haven't landed a job.