China says to give more support to services firms

China's cabinet moved on Wednesday to promote the growth of the services sector, lowering the capital required to set up a service-orientated firm and pledging to provide further fiscal support.

In a circular posted on the central government's Web site (www.gov.cn), the State Council said that it would decrease to 30,000 yuan ($4,250) the minimum registered capital required to start up a services firm.

It did not provide the previous requirement.

The cabinet added that it would expand tax incentives and increase government investment in the services sector, as part of efforts to help shift the burden of economic growth away from investment and exports and more towards domestic demand.

China's services sector is relatively underdeveloped, and many such firms find it hard to secure loans from banks that are more used to dealing with big state-owned manufacturers.

The cabinet ordered the central bank and other regulators to guide financial institutions to provide more loans to services firms, and to help suitable ones issue shares.

While the document was short on detail, such cabinet orders generally serve as the basis for later implementing regulations issued by relevant ministries and regulatory agencies.

One area the cabinet highlighted was the need for financial firms and other service providers, such as consulting firms, law firms and human resources firms, to expand their businesses overseas so as to keep up with their customers' global needs.

China, looking to secure resources and build global brands, is encouraging companies in a range of sectors to invest abroad, and banks and other firms are also setting up shop in places where their customers are going.

"While strictly controlling risks, we should actively support qualified domestic financial firms to engage in cross-border operations to provide financial services to our companies that are competing in global markets," the document said.