China's cabinet announced that it would increase financial support for small firms affected by rising raw material prices, power shortages, and recent COVID-19 outbreaks.

Since early last year, Chinese authorities have announced a slew of policies aimed at assisting small businesses, which are critical for growth and jobs but have been particularly hard hit by the COVID-19 outbreak.

"Recently, small and medium-sized firms' costs have increased, and difficulties in their operations have worsened," the cabinet said, citing rising raw material prices, weak orders, high logistical costs, and power cuts as examples.

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Local authorities would provide relief funding, as well as tax breaks, for small businesses that are temporarily experiencing difficulties but have long-term market potential, promising projects, and competitive technology, it said. 

It announced that the central bank would increase credit support for small businesses, making effective use of the annual relending quotas.

China's cabinet announced in September that it would increase annual relending quotas by 300 billion yuan ($47 billion) to boost financing support for small businesses.

China's cabinet declared that it would crack down on illegal activities such as hoarding and speculation on commodity prices, and that futures companies should assist small businesses in hedging risks from price swings.