III. Implement national tax policy and use fiscal policy guidance 

1. Favor scientific and technological innovation In the following ways: follow national requirements and use the tax system to encourage businesses in increasing innovation input and scientists in using scientific findings, improve enterprise R&D expense calculations and reviews, improve management, expand preferential policy applications by using R&D expenses to offset taxes, use the preferential tax policy for innovation investment, restrict investment in new high-tech enterprises, give limited partnership venture capital firms favorable tax policies in accordance with the law, allow scientific researchers in new high-tech small-to-mid-sized enterprises to pay individual income tax from the commercialization of research over a 5-year period, and improve new high-tech enterprise recognition and provide a 15-percent cut in corporate income tax for accredited high-tech service businesses. 

2. Improve preferred procurement policies for innovative products and services in the following ways: ensure that government gives priority to these and push for application of innovative products, draw up recommended innovative product inventory and for those on the list that are marketed for the first time use a government procurement contract for suppliers, cooperate in major innovation products and technology needed by the government, choose developers and producers through competition and negotiation or sole source purchase, let government purchase innovative products that are patented through sole source purchase, explore polices that support government purchase of innovative products, apply government incentives and policies on R&D and use of top intelligent equipment. 

3. Increase government support for angel investment in the following ways: increase guidance funds from government, increase innovation result input in seed and start-up stages, use capital to increase investment, use guidance funds in angel investment to transfer stock equity to other shareholders over a 5-year period, and let government establish risk compensation of no more than 60-percent of actual investment loss by venture capitalists who invest in science companies during seed and start-up stages. 

4. Establish large policy financing assurance institute and build credit guarantee fund for micro-to-small-to-mid-sized enterprises, make optimal use of financing assurance services to help innovative development of small-to-mid-sized technology enterprise and micro-to-small businesses, and provide credit services for small-to-mid-sized technology enterprises through financing assurance, re-guarantee and equity investment. 

5. Encourage public entrepreneurships and innovation, increase fiscal input at the city, district and county level, make optimal use of fiscal support, develop national micro-to-small business start-ups and innovation bases, increase service capacity, encourage districts and counties to cover some costs of remodeling business incubation space, infrastructure and interest on loans, provide intermediary, accounting and legal services for micro-to-small businesses through government purchases to reduce start-up costs, use "scientific innovation coupon" as a subsidy for business innovation or start-up teams in using equipment from Shanghai’s R&D public service platform, use the market to support business start-up projects, use a guidance program for university students in innovative undertakings and provide business start-up loan guarantees.