China plans to allow small-and medium-sized companies to issue bonds in private placements next year to help them raise funds, Reuters reported on Dec 7, citing the Securities Times.

Related readings:  With government support, SME potential is vast  Local SME optimism firmly stable: HSBC survey  China rolls out policy to promote development for the SMEs  Economist: Credit to SMEs key to solid recovery

The government will soon launch a trial of the program, the paper said, citing information from the China's National Association of Financial Market Institutional Investors (NAFMII).

The move comes as a growing number of mid-sized enterprises, that are not involved in the financial sector, have struggled to raise funds on the stock market.

These firms will not need approval from the exchange regulator, but will need to report to the NAFMII after securing investors for their placements, the paper said.