Chinese premier Wen Jiabao said the government will introduce measures to support small and medium companies in China, including establishing a US$2.39 billion fund to promote their development, The Wall Street Journal reported. Additional measures will include tax incentives, easier access to lending and cash support. China will also continue a program aimed at replacing business tax with a value-added tax. Recent declines in exports and tightening of bank lending have unproportionately affected China’s small companies, which employ a large proportion of the country’s work force. While the country’s official Purchasing Managers’ Index, published by the China Federation of Logistics and Purchasing, showed that manufacturing activity was still strong in January with a reading of 50.5, an PMI published by HSBC (HBC.NYSE, HSBA.LON, 0005.HKG) that is weighted more towards smaller companies measured only 48.8.