BEIJING - Many small and medium-sized enterprises (SMEs) in China have been held back from achieving their full potential by the hurdles they have had to navigate to obtain loans.

Following lawmakers' second reading of a draft amendment to the law on the development of SMEs, which contribute the majority to the country's GDP and job creation, things are -- at last -- looking up.

Panel discussions on the draft revision were held Tuesday on the last day of the bi-monthly session of the National People's Congress (NPC) Standing Committee.

Generating about 60 percent of GDP and 80 percent of jobs, SMEs have emerged as important pillars that support both the economy and social stability, said Zhang Jingqiang, executive president of China Association of SMEs.

"The revision is encouraging news for SMEs and will have a profound impact on the country's economic health," he added.

The draft ordered authorities to set clear policies for tax preferences, ensure easy access to finance, lower the costs associated with establishing startups, as well as offer support for innovation and training.

"An important highlight of the draft is that it specifies the leading government department for SME management," Zhang said.

Currently, there is no designated leading department, meaning responsibilities are not defined and making it difficult to review the law's implementation, Zhang said.

Amid a wider nationwide push to reduce taxes and charges, targeted measures designed to support SMEs will lighten the financial burdens carried by small companies, he added.

The central government will reduce corporate costs by 1 trillion yuan ($146 billion) this year by slashing taxes and fees.

Moreover, measures to streamline administrative approvals, delegate power and improve regulation and services have also been felt by companies.

"At present, administrative efficiency is improving as is the policy environment, both good news for SMEs," said Zeng Ziyuan, founder of a Fujian-based sci-tech firm.

However, SMEs are less competitive than large companies, thus, need tailored supporting policies, Zeng told Xinhua.

Financing has always been a headache for small companies, including Beijing Petsknow Sci-Tech Co.

Founder Gao Maoxiang said Petsknow had experienced the lack of well-functioning financing channels firsthand.

"SMEs are unlikely to get bank loans under the current system, which mostly serves large companies. Private lending is not only expensive but also substandard," Gao said.

Previously, financing support for SMEs has been included in documents and regulations, which lay down principles but are not operable, Zhang said.

The draft, which is subject to further readings, included measures to regulate financing for small companies.

However, the law should put more focus on small- and micro-sized companies, Wu Xiaoling, NPC Standing Committee member and former deputy governor of the central bank, suggested during a panel discussion.

As 98 percent of companies are SMEs, it is impossible for policy banks to support all of them, Wu said. "We should focus on small and micro companies, which face the most difficulties."

The UN General Assembly designated June 27 as "Micro-, Small- and Medium-sized Enterprises Day" starting this year.