Premier Wen Jiabao has urged stronger financial support for China's small businesses, in addition to enhanced regulation of private lending activities.

During a visit to east China's Zhejiang Province on October 3-4, Wen said small enterprises should be a priority for bank credit support and enjoy better preferential tax policies.

Wen also requires banks to increase their tolerance for the non-performing loan (NPL) ratios of small enterprises, set targets for the proportion and growth of loans to small companies and reduce the cost of securing credit.

Small businesses create 80 percent of the country's jobs, but have difficulty securing bank loans. A growing number of cash-strapped companies have shut down in recent months and others have resorted to the private lending market, which operates outside the banking industry and typically features higher interest rates.

The China Banking Regulatory Commis-sion has encouraged banks to set up special operations to ease small firms' financial difficulties and carry out differentiated NPL supervision on loans to small enterprises.