BEIJING Chinese ministries, regulators and the central bank on Tuesday pledged more financing support to small businesses, suggesting an urgency among policymakers to revive the private sector amid a flagging economic recovery.

China will encourage financial institutions to offer targeted and diversified financial support to some small and medium-sized enterprises in the manufacturing sector, according to a joint statement by the industry and finance ministries, financial and securities regulators and the central bank.

Small and medium-sized enterprises in key industrial sectors will also be offered appropriate products for foreign exchange hedging, the statement said.

Earlier on Tuesday, China's top economic planner announced an extension of loan support tools for small businesses until the end of 2024, vowing to expand credit for private firms and meet their demand for land.

The flurry of initiatives to help to private businesses comes after authorities vowed to make the sector "bigger, better and stronger" after small businesses were squeezed during three years of COVID curbs.

The private sector accounts for 60% of China's gross domestic product and 80% of urban jobs.

Investors have been awaiting concrete stimulus measures as data suggested the economy still struggled in July. Chinese stocks closed down on Tuesday after a sharp rebound in recent sessions.

Private fixed-asset investment shrank 0.2% year-on-year in the first half of 2023, in contrast to an 8.1% rise in investment by state entities, highlighting weak private sector confidence.

(Reporting by Ellen Zhang and Ryan Woo; Editing by Jacqueline Wong and Mark Potter)