The State council is organizing departments to draft a series of supportive policies for small and medium enterprises (SMEs), which is expected to be launched later this year, the Economic Information reported Friday.

An industry insider told the reporter that China will issue policies to guide private capitals investing and financing in SMEs. China will also loosen policies and clear entrance barriers for SMEs, according to the newspaper.

The policies will be implemented throughout the 12th Five-Year period (2011-2015).

Liu Gongxiao, the director of the Machinery Industry Information Center, who has been involved in researching and making related policies, told the reporter that China will help SMEs to establish a modern enterprise system and credit system and solve the problems through the issuance of bond funds and equity financing.

According to Liu, encouraging the self-innovation of SMEs will be a focus of the draft policies, the newspaper reported.