BEIJING -- The Chinese central government on Monday rolled out favorable measures on financial leasing following a top-level meeting chaired by Chinese premier in August that resulted in the decision to boost the sector to help cash-strapped firms.

Authorities will cut red tape, improve regulation and gather support from other financial institutions to accelerate development of the sector, said a guideline released by the State Council, China's cabinet.

The guideline encourages government agencies to purchase and provide public services through financial leasing, adding that legislation for the sector is being considered to improve supervision.

Cheaper and more tailored to borrowers' needs than traditional loans, financial leasing is favored by startups and companies with weaker credit.

Local governments should take advantage of new measures, such as interest subsidies, to guide financial leasing businesses to better serve small and medium-sized enterprises, the guideline said.

Confronted with a sluggish real economy, China has started to rely on the emerging financing channel to aid small companies and facilitate industrial upgrades.

China plans to develop the industry into a world-class sector in terms of market size and competence by 2020.