The Chinese government will guide investment into five key areas of the economy to help competitive enterprises out of difficulty and ensure steady economic development, an official from the Ministry of Industry and Information Technology said on Tuesday.

Hou Shiguo, chief of the ministry's industrial policy department said in an interview with Xinhua News Agency that the five preferred areas are agriculture, economic restructuring, energy saving and emissions reduction, independent innovation and social undertakings.

Meanwhile, the capacity of sectors with high energy consumption and heavy pollution will be restricted from unlimited expansion, Hou said.

Although the nation's industrial restructuring efforts have born fruit in the past decades, problems concerning improper industrial structure still occur and may lead to excessive energy consumption, pollution and unstable economic performance, Hou said.

Therefore, the government should encourage the development of key technologies, equipment, and products which can facilitate industry structural upgrading. In addition, less-developed sectors including agriculture, service industry, environmental protection, as well as resource saving and comprehensive utilization also needs additional investment.

Affected by negative factors both at home and abroad, quite a few small- and medium-sized enterprises (SMEs) in the country have encountered difficulties in their operations since last year, some even closed down.

According to Hou, some enterprises failed to meet upgraded environmental and production standards and were eliminated by market competition. This is in line with the nation's policy target of optimizing industrial structure and cutting emissions.

However, government policies should lean towards enterprises with advanced technologies and sound development foundations, and help them out of temporary difficulties like energy costs and slowing market demand, he noted.

As part of the efforts, the government raised the tax rebate on a range of textiles and garments to 13 percent from 11 percent earlier this month, to help exporters struggling with yuan appreciation, weakening demand and rising costs. Meanwhile, fiscal and taxation supports as well as a credit ease are also in the pipeline, Hou said.

These policies will create a positive environment for SMEs' development and press them for further structural adjustment, he added.

(Chinadaily.com.cn August 28, 2008)