The government in Yiwu, a county-level city in East China's Zhejiang province, has earmarked a record-high funding of 40.8 million yuan ($6.27 million) to reward the city's 68 companies that obtained the qualification of "national new high-tech enterprise" last year, according to the Yiwu administration of science and technology.

The move is part of local authorities' efforts to expand the size of high-tech companies and spur the development of high-tech industries.

"Yiwu has been trying to build a complete system to support every step in the development of a high-tech firm, spanning from entrepreneur teams, small and medium enterprises, candidates for national new high-tech enterprise, national new high-tech enterprises, to "little giants" (SMEs that focus on a market niche and master key technologies with strong innovation capacity)," said an official from the Yiwu administration of science and technology.

The Yiwu government has been constantly stepping up its support for high-tech companies. The city's recently revised regulation states that a Yiwu enterprise that is above a designated size (with an annual operating revenue of roughly $3.1 million or more) is eligible for a bonus of 400,000 yuan when it is first awarded the qualification of "national new high-tech enterprise", and a bonus of 200,000 yuan when it obtains the qualification again.

The regulation also grants other forms of rewards to high-tech companies according to their R&D expenses. For example, if a high-tech company's annual R&D expenses exceed 30 million yuan, 10 percent of the expenses will be covered by the Yiwu government. The covering rates for R&D expenses that are between 20 and 30 million yuan and between 1 and 20 million yuan are 8 percent and 6 percent respectively. The upper limit for the compensation is set at 10 million yuan.

Over the past two years, Yiwu has doubled its number of national new high-tech enterprises and provincial-level tech-based SMEs.

The city is currently home to 228 national new high-tech enterprises and 1,066 provincial-level tech-based SMEs.