Shanghai's newly established technology-based firms will be able to apply for up to 500,000 yuan (US,200) worth of annual government funding starting next month to industrialize their scientific achievements.

　　Since Shanghai has been chosen by the State Ministry of Science and Technology to be one of 20 trial places for its Innovation Fund for Small Technology-based Firms, some 12 local start-up companies are expected to benefit from a 3 million yuan annual fund from the central government.

　　The money is set aside to help small private firms with capital deficiency, according to a recent technology forum, "2003 Capital Infusion for High-tech Start-ups," backed by the city's Science and Technology Committee.

　　Successful applicants will also be able to receive an equal amount of financial grants from the Shanghai government's Science and Technology Committee.

　　Technology-based firms established within 18 months with registered capital of less than 1 million yuan can submit their applications to the committee.

　　The small companies have to work on technical innovation projects, which are included in the local government's industry development guideline. The firms also need to be recognized by the city's high-tech industrial parks. Companies in the information technology, new material and chemical industries will have priority in getting the funds.

　　"Since the private high-tech companies are often too small and are considered risky to get bank loans, the government should do something to help," said a committee official who asked not to be identified.

　　Recipients do not need to return the money to the government even if their business turns out to be a failure. But the committee will ensure the funds are used properly.